Mortgage Rates Hover Near 6%

Mortgage rates are closely tied to the 10-year Treasury note, a benchmark for economic health. When investors feel confident, they often shift to riskier investments, causing Treasury yields to rise and mortgage rates to follow. Geopolitical events, like the U.S.-Israeli war with Iran, can significantly impact oil prices, which in turn affects inflation expectations. Rising oil prices can lead to increased costs for goods and services, pushing inflation higher and prompting lenders to raise mortgage rates. The average 30-year fixed mortgage rate hit a historic low of just under 3% in 2021 but peaked at over 16% in 1981. In 2025, the average was 6.66%. Concerns about "stagflation" – a combination of rising inflation and economic stagnation – are resurfacing as oil prices reach $100 a barrel. Some analysts predict that mortgage rates could exceed 6.25% in the short term, but easing tensions could lead to a decrease.