As oil prices rose alongside renewed hostilities in the Iran war, Treasury yields advanced and mortgage rates followed. Mortgage News Daily reported the national average for a 30-year fixed loan increased by 0.06 percentage point on Monday to 6.87%, marking the highest reading since June 2025.
Rates now sit 0.12 percentage point above Thursday's level and have added more than 0.30 percentage point over the past two months. Expectations earlier this year for a downtrend were knocked off course by the conflict and the related surge in oil. Commenting on the move, Mortgage News Daily's chief operating officer, Matthew Graham, said, "While rates are technically at their highest level in more than a year, they haven't exactly exploded with surprising, new momentum." "Instead, it's been more of a slow grind fueled by the usual suspects: inflation expectations, elevated bond issuance, and economic resilience. All three of those factors are subject to at least some variability in the future." The day before the war began, at the end of February, the 30-year fixed averaged 5.99%.
At today's rate, financing a $450,000 home with 20% down on a 30-year fixed equates to a $2,363 monthly principal-and-interest payment - $207 more per month than at the end of February. Beyond the bigger payment, higher borrowing costs reduce the number of buyers who can qualify, as debt-to-income ratios shift against applicants when rates climb.
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Tight supply is supporting prices, and some regions are seeing faster gains again. The latest reading from the S&P Cotality Case-Shiller home price index shows national prices were up 1.5% year over year in June, accelerating from a 1.2% increase in May. In a news release, S&P Dow Jones Indices' associate director of commodities, Rebecca Kaufman, said, "As financing costs are kept high for prospective buyers, current homeowners remain reluctant to give up the low mortgage rates secured in prior years."
