US Mortgage Rates Soar to New High as Oil Prices Fuel Inflation Fears
Mortgage rates have reached their highest point of 2026, hitting 6.58% last week according to Freddie Mac data. This marks a three-week upward trend and is slightly lower than the year-ago average of 6.74%. Rising inflation tied to crude oil prices has been the main driver of the rate increases.
The 10-year Treasury yield, which lenders use as a guide for pricing home loans, was 4.7% at midday July 24, up from 4.57% a week earlier and just 3.97% in late February before the Iran conflict began. Conflict in the Middle East has driven oil prices sharply higher, stoking expectations of hotter inflation.
The Federal Reserve is scheduled to meet this week, with a rate decision expected on Wednesday at 2 p.m. ET. While economists widely expect interest rates to remain unchanged at their current range of 3.50% to 3.75%, rising oil prices have prompted some investors to increase bets that a rate hike could come later in 2026 if inflation accelerates further.