Mortgage Rates, Now 6.5%, Hit Highest Level Since War Began
The New York Times • • business
Key Points:
- The 30-year fixed mortgage rate in the U.S. rose to 6.51 percent, its highest level since August, amid ongoing conflict in the U.S.-Israeli war with Iran approaching its third month.
- This increase follows weeks of steady rates but remains below the October 2023 peak of 7.79 percent, occurring as consumers face higher debt and increased prices due to constrained energy supplies.
- Disruptions in the Strait of Hormuz have cut about 20 percent of global oil supply, driving gasoline prices in the U.S. up 53 percent since the war began, with the average gallon costing $4.56.
- Rising inflation concerns have pushed yields on U.S. Treasuries to levels not seen since the global financial crisis, contributing to higher mortgage rates linked to these Treasury yields.
- The S&P 500 dipped following the mortgage rate announcement, reflecting investor anxiety over inflation and the economic impact of rising borrowing costs for governments, homeowners, and businesses.