Mortgage rates hit highest level in nearly a year

• The 30-year fixed mortgage rate hit 6.58%, the highest since August 21, 2025, while the 15-year fixed rate rose to 5.96% from 5.93%
• Rates are being influenced by the 10-year Treasury yield at 4.699% and concerns about inflation from elevated oil prices due to renewed U.S.-Iran conflict
• Realtor.com forecasts home price growth will slow to 1.2% in 2026, below the inflation rate, meaning real home prices would effectively decline

Summary: Mortgage Rates Reach Nearly One-Year High

Key Developments:

Mortgage rates climbed to their highest level in approximately 11 months, according to Freddie Mac's latest Primary Mortgage Market Survey. The 30-year fixed mortgage rate rose to 6.58% this week, up from 6.55% the previous week. This matches levels last seen on August 21, 2025, though remains below the 6.74% rate from a year ago.

The 15-year fixed mortgage rate also increased to 5.96%, up from 5.93% last week, compared to 5.87% a year earlier.

Market Drivers:

Mortgage rates are tracking movements in the 10-year Treasury yield, which rose slightly to 4.699%. According to LoanDepot's Chief Economist Jeff DerGurahian, rates reflect a "tug-of-war" between inflation concerns and geopolitical tensions, particularly renewed U.S.-Iran conflict driving oil prices higher and raising fears of elevated energy costs filtering into inflation.

Industry Outlook:

Freddie Mac Chief Economist Sam Khater emphasized that borrowers shopping around for rates could save thousands over the loan's lifetime. Despite elevated rates, experts suggest homebuyers should focus on total homeownership costs rather than attempting to time rate movements.

Housing Market Context:

Realtor.com's midyear 2026 forecast projects home price growth slowing to 1.2% this year—below both original forecasts and current inflation rates. This represents an effective decline in real, inflation-adjusted terms. Many potential buyers remain sidelined due to tight inventory supporting higher prices combined with sustained elevated mortgage rates.