US mortgage rates climb to 6.66% highest in a year

U.S. mortgage rates have surged to their highest level in approximately a year, adding significant pressure to a housing market already strained by affordability challenges. The average rate on a 30-year fixed mortgage climbed to 6.66% this week, according to data released on Thursday, July 30, by Freddie Mac, marking a notable increase from 6.58% the previous week. Separate data from the Mortgage Bankers Association placed the rate even higher, at 6.76% for the week ending July 24.

The primary drivers behind the increase are persistent inflation concerns and rising energy prices, which have been exacerbated by ongoing geopolitical conflict. A five-month armed conflict in Iran, which began in February, has disrupted global energy supplies, pushing crude oil prices higher. Investors fear that expensive energy will keep inflation stubbornly above the Federal Reserve's 2% target, leading to a sell-off in the bond market. The yield on the 10-year Treasury note, a key benchmark for pricing mortgages, has risen sharply, reaching approximately 4.66% this week, up from 3.97% in late February.

This macroeconomic unease comes as the Federal Reserve signals a continued restrictive stance....