Mortgage rates in the United States have climbed to their highest level since the conflict with Iran began, as rising Treasury yields continue to push borrowing costs higher.

The average rate on a 30-year fixed mortgage rose to 6.55%, the highest level in nearly a year after briefly falling below 6% earlier this month. The increase followed a rise in Treasury yields as renewed fighting with Iran fueled concerns that higher oil prices could complicate progress in lowering inflation.

The higher rates are already being reflected in the housing market. Pending home sales fell 5.4% in June compared with the previous month and were 0.3% lower than a year earlier. Mortgage applications also declined 7% last week and remain 2% below their level from the same period last year.

Mortgage rates generally track the yield on the 10-year U.S. Treasury note. Although annual inflation eased to 3.5% in June from 4.2% in May, economists say higher energy prices could make it more difficult for borrowing costs to move lower in the coming months.

Zillow expects mortgage rates to gradually ease later this year, forecasting they will end 2026 at around 6.4%, though that would still be above where they ended last year.

(YWN World Headquarters – NYC)