Mortgage rates in the United States have surged to their highest level in more than a year, according to Freddie Mac's latest Primary Mortgage Market Survey released on Thursday. The average rate on the benchmark 30-year fixed mortgage increased to 6.71%, up from 6.66% the previous week. This marks the highest reading since July 31, 2025, when the average rate was 6.72%. For comparison, the average rate on a 30-year loan stood at 6.5% a year ago. The average rate on a 15-year fixed mortgage also rose, reaching 6.04% from last week's 5.98% [1].
Sam Khater, Freddie Mac's chief economist, noted that "purchase demand has remained relatively stable indicating steady interest from buyers adapting to evolving market conditions" [1]. Mortgage rates are influenced by several factors, including the Federal Reserve and geopolitical developments. While not directly tied to the Fed's interest rate decisions, mortgage rates tend to follow the 10-year Treasury yield, which hovered around 4.74% as of Thursday afternoon [1].
The rise in mortgage rates has been attributed in part to the ongoing conflict between the U.S. and Iran earlier this year. Realtor.com senior economist Jiayi Xu explained that the Middle East conflict has put upward pressure on oil prices, fueling inflation and pushing it further from the Federal Reserve's 2% target. Xu added that when the conflict seemed to be nearing resolution, bond yields and mortgage rates declined, but the latest escalation in Middle East tensions has driven oil prices higher, reviving inflation concerns and causing yields and mortgage rates to rise again [1].
CONCLUSION
Mortgage rates have reached their highest level in over a year, driven by rising Treasury yields and renewed inflation concerns stemming from geopolitical tensions. Despite higher rates, purchase demand has remained relatively stable, indicating that buyers are adapting to the evolving market environment.