U.S. mortgage rates climb back above 6% as Middle East war rattles housing market

Financial News New York City bureau, Reporter Lee Byung-chul.As airstrikes by the United States of America (U.S.) and the State of Israel on the Islamic Republic of Iran intensify the war in the Middle East, U.S. mortgage rates are rising again. The recent downward trend in rates, which had fallen below 6% for the first time in several years and raised hopes for a housing market recovery, has stalled, prompting concerns that the burden on homebuyers will grow again.
According to mortgage finance company Freddie Mac on the 12th (local time), the average rate on a 30-year fixed-rate mortgage in the U.S. rose to 6.11%. This marked the second consecutive weekly increase.
At the end of February, mortgage rates had dipped below 6% for the first time in years, fueling expectations that the frozen U.S. housing market might start to move again.
However, subsequent attacks on the Islamic Republic of Iran by the U.S. and the State of Israel pushed up energy prices and reignited inflation fears, shaking financial markets.
The war in the Middle East has also affected yields on U.S. Treasury bonds.
The yield on the 10-year U.S. Treasury bonds, which serves as a benchmark for U.S. mortgage rates, climbed to 4.25%. That is a sharp rise from levels below 4% before the war.
Jeff Dzgourian, chief investment officer (CIO) at mortgage lender loanDepot, said, "If the conflict in the Middle East drags on and oil prices remain elevated, the Federal Reserve System (Fed) will take a more cautious stance," adding, "At this point, the odds of a rate cut are essentially fifty-fifty."
The U.S. housing market has been virtually stagnant since the COVID-19 pandemic.
Record-low interest rates during the pandemic triggered a home-buying frenzy, sending prices soaring, while millions of homeowners refinanced their mortgages at rates of 4–5% or lower.
As rates later rose, many owners became reluctant to sell their existing homes and take out new mortgages.
Recent surveys also show that many Americans feel that buying a home is realistically out of reach.
According to real estate platform Redfin, one in four Americans is postponing major purchases such as buying a home.



pride@fnnews.com Reporter Lee Byung-chul Reporter