- Mortgage rates were up sharply this week.
- The weekly average for a 30-year, fixed-rate mortgage hit 6.51%.
- Iran war seen as playing "an outsized role" in driving up rates.
Mortgage rates just hit the highest level since August 2025.
The weekly average for a 30-year, fixed-rate mortgage reached 6.51% Thursday, up from 6.36% a week earlier, according to the Federal Home Loan Mortgage Corporation, better known as Freddie Mac.
The last time rates rose so sharply was April 2025, when markets tumbled after President Donald Trump unveiled his sweeping tariff policy. Then, the weekly average surged 0.21 percentage points to 6.83%.
Polling last year found that many Americans, including nearly half of Utahns, were hesitating when it came to making major purchases like a home because of the tariffs, which changed repeatedly before largely being struck down in the courts.
Now, it’s the war launched by the U.S. and Israel against Iran that’s fueling economic uncertainty and driving up costs. Before the ongoing war began in February, mortgage rates had dropped below 6% for the first time since 2022.
The Iran war’s impact on mortgage rates
“The conflict in the Middle East continues to play an outsized role in how investors are assessing the economic outlook, and mortgage rates are moving accordingly,” Realtor.com senior economist Anthony Smith said in a post Thursday.
Smith said “headlines suggesting escalation have tended to push longer-term yields higher.” That includes the 10-year U.S. Treasury bond closely tied to mortgage rates, nearing what Barron’s called the “danger zone” for yields this week along with the 30-year bond.
Daily mortgage rates, tracked by Mortgage News Daily, were as high as 6.75% this week before slipping to 6.65% by midday Friday on news that a Pakistani military official was in Iran to mediate peace talks.
How much higher are mortgage payments now?
What do higher rates mean for homebuyers? CNN calculated that the monthly payment on a $450,000 home would be roughly $2,278 at the current average rate, assuming a 20% down payment.
But if mortgage rates were still just under 6%? That monthly payment falls to about $2,154. The difference that buyers pay under the current rate, the cable news network figured, is an extra $1,488 annually or a total of more than $44,640 over the loan’s 30 years.
“There are two barriers to home ownership that are relevant right now. One is high mortgage rates; the other is uncertainty. When you buy a house, you’re cutting the biggest check you’ve ever cut in your life,” Brad Case, chief economist at Homes.com, told CNN.
Case said buyers “have to have a firm foundation to make this big decision, and that’s what people are missing as a result of the moves in rates since the beginning of March, regardless of whether they’re up or down.”