The 30-year fixed mortgage rate in the United States hit 6.97% last week, its highest level since May 2025, up 12 basis points from the previous week. Mortgage applications fell 4.1% week-over-week, with the refinance index plunging 8.8%. This surge is explained by geopolitical tensions between Israel and Iran that pushed oil prices higher and revived inflation expectations, driving bond yields to multi-year highs near 5%. The Federal Reserve is expected to announce its first rate hike since 2023 on September 16.
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