US Mortgage Rates Soar Back Above 7% Amid War with Iran and Inflation

The US housing market has hit another roadblock as mortgage rates have climbed back above 7% for the first time since January 2025, according to Freddie Mac data cited by The New York Times.

This spike in rates comes at a bad time for the industry, which had seen some improvement after falling below 6% in late February. However, the US and Israel's attacks on Iran on February 28 sent mortgage rates rising, and they have continued to climb ever since.

The war with Iran has driven up oil prices, further adding to the pressure on the Treasury bond market, which sets mortgage rates. The yield on the 10-year bond exceeded 5%, a level not seen since before the 2008 financial crisis.

Adding to the woes of the housing market is inflation, which remains at 3.4% year-over-year in August, leading the Federal Reserve to raise interest rates this month.