Overview
- Mortgage interest rates have climbed into the mid-to-high 6% range and are approaching 7% on some 30-year loans, with HousingWire reporting averages near 6.94% and the MBA showing a 6.76% contract rate for the week ended July 24.
- Renewed U.S.-Iran hostilities in July pushed oil prices and 10-year Treasury yields higher, and those moves have transmitted to mortgage costs because long-term Treasury yields help set home loan rates.
- Mortgage Bankers Association data showed a brief rebound in applications for the week ending July 17 followed by a 6.4% drop in overall applications for the week ended July 24 driven by a near 10% fall in refinancing requests.
- Forecasters from Fannie Mae, the MBA and private lenders now expect rates to stay in the mid- to high-6% band through the fall with Federal Reserve statements, inflation reports and oil-price trends the key near-term risks.
- Higher rates are squeezing monthly payments and some loan products like reverse mortgages, prompting borrowers to consider ARMs, paying points, temporary buydowns or lower-priced homes and reducing supply as many owners remain locked into cheaper pandemic-era mortgages.