The average rate on the U.S. 30-year fixed-rate mortgage climbed to 6.38% on Thursday, reaching its highest point since early September, according to mortgage finance agency Freddie Mac. The figure is an increase from last week's 6.22% and marks the fourth straight weekly rise in the widely watched gauge.
Market participants and economists point to higher oil prices linked to the dragging Middle East war as a central driver of the move. The conflict has coincided with a more than 30% rise in oil prices since it began at the end of February, a surge the market interprets as upward pressure on inflation. That inflationary impulse has in turn contributed to higher U.S. Treasury yields, which mortgage rates typically follow, particularly the benchmark 10-year Treasury yield.
The recent ascent in mortgage borrowing costs undercuts attempts by the Trump administration to improve housing affordability. The rate briefly fell to 5.98% on the eve of the Iran war after U.S. President Donald Trump ordered Freddie Mac and Fannie Mae to expand their purchases of mortgage-backed securities. Since then, geopolitical developments and the accompanying rise in oil have reversed that move, producing a multi-week uptick in the 30-year rate.
Industry observers say higher mortgage rates could weigh on home sales at a time of year that usually sees increased activity. The combination of elevated borrowing costs and rising energy prices feeds into affordability calculations for prospective buyers, and the issue has become a notable political theme as attention turns toward the November midterm elections.
In short, the path of oil prices and the response of Treasury yields are key near-term factors for mortgage rates. The 6.38% average recorded on Thursday reflects the market's current pricing of those risks and highlights how developments in energy markets and geopolitics can transmit to household financing costs.