Mortgage rates surge to highest level since July
CNBC • • business
Key Points:
- Growing concerns about the war with Iran have led to rising bond yields, causing mortgage rates to increase, with the average 30-year fixed loan rate reaching 6.75%, the highest since July 31.
- Mortgage rates have climbed 33 basis points in the past 10 days and are 46 basis points above their April low of 6.29%, following a sharp spike earlier in the year from 5.99% to 6.64%.
- The increase in rates significantly impacts housing affordability; for example, a buyer with 20% down on a $420,000 home now faces a $167 higher monthly principal and interest payment compared to the April rate.
- Homebuilders are somewhat insulated from rate hikes by buying down mortgage rates to attract buyers, and current rates remain lower than the peak above 7% seen a year ago.
- Analysts suggest that rising bond yields reflect market pressure on politicians to resolve the conflict, warning of worsening economic consequences if the war continues.