Mortgage rates have surged to 6.87%, which is 12 basis points higher than last Thursday and is driven by rising oil prices:
Mortgage rates typically follow bond yields, which are being pushed higher by the Iran war:
- The average rate on the 30-year fixed mortgage is now 6.87%:
- That rate is 12 basis points higher than it was Thursday:
- The jump in oil prices has pushed bond yields higher:
The rise in mortgage rates is also fueled by economic resilience, high inflation expectations, and elevated bond issuance:
While rates were expected to fall this year, the war with Iran and its resulting rise in oil prices changed that:
For instance, for someone buying a $450,000 home with a 20% down payment, the monthly principal and interest payment on a 30-year fixed mortgage today would be $2,363, which is $207 more than it would have been at the end of February:
As rates rise, fewer borrowers can qualify for a mortgage, as it shifts the debt-to-income ratios that lenders rely on:
This comes on top of rising home prices, which seem to be accelerating again in some parts of the country:
