The average long-term mortgage rate in the United States broke from its lowest level in 3-1/2 years this week, as bond yields rose following a rise in oil prices due to the war with Iran.
The benchmark 30-year fixed-rate mortgage rate rose to 6% from 5.98% last week, mortgage buyer Freddie Mac said Thursday. A year ago, the rate averaged 6.63%.
The modest increase ends a three-week decline in the average rate, which has been hovering around 6% this year. Last week’s average rate marked the first time it fell below 6% since September 2022.
Meanwhile, borrowing costs for 15-year fixed-rate mortgages, popular among homeowners refinancing their home loans, fell this week. That average rate fell to 5.43% from 5.44% last week. A year ago, it was 5.79%, Freddie Mac said.
Mortgage rates are influenced by several factors, from the Federal Reserve’s interest rate policy decisions to bond market investors’ expectations about the economy and inflation. They generally track the path of the 10-year Treasury yield, which lenders use as a guide in pricing mortgage loans.
The 10-year Treasury yield was 4.14% at midday Thursday, down from 4% a week ago.
Treasury yields have risen recently as rising oil prices put more upward pressure on inflation, which could prevent the Federal Reserve from cutting interest rates.
The central bank does not set mortgage rates, but its decisions to raise or lower its short-term rate are closely watched by bond investors and can ultimately affect the yield on the 10-year Treasury bonds that influence mortgage rates.
“For rates to continue falling in 2026, we will need clear signals in the coming months that this conflict is not driving up prices for domestic consumers,” said Joel Berner, senior economist at Realtor.com. “Given the significant jump in oil prices this week and the rising shipping costs that come with it, this positive inflation news may be hard to come by.”
Mortgage rates have been trending lower for months, helping fuel a rebound in home sales in the final four months of 2025, though not enough to lift the housing market out of its slump that dates back to 2022, when mortgage rates began rising from pandemic-era lows.
Sales of previously occupied U.S. homes remained stagnant last year at their lowest levels in 30 years. And more favorable mortgage rates for buyers this year were not enough to boost home sales last month.
A sharp rise in home prices, especially in the early years of this decade, and a chronic nationwide housing shortage, compounded by years of below-average home construction, have left many aspiring homeowners out of the market.