Average 30-year fixed-rate mortgage hits highest level in a year at 6.66% as Middle East tensions and inflation concerns persist.
The average 30-year fixed-rate mortgage reached 6.66% this week, marking the highest level in a year according to Freddie Mac. This increase reflects growing investor concerns regarding inflation and the ongoing conflict in Iran, which has driven up oil prices and shipping costs. While the Federal Reserve held its benchmark interest rate steady this week, a split vote among committee members and comments from Chairman Kevin Warsh suggested that future rate hikes may be pending. New government data indicates that inflation slowed slightly in June, though it remains above the Federal Reserve's 2% target. Experts suggest that mortgage rates will likely remain elevated until energy prices stabilize and inflation remains under control. Despite the rise, current rates are still lower than the previous year's peak of 6.72%. However, the housing market remains tepid as sales have barely moved over the last three years, with mortgage applications falling 6.4% last week. Analysts note that while wage growth has outpaced home-value growth this year, the rising cost of everyday goods continues to limit buyer affordability.