Mortgage rates reached their highest level since the end of August, following a week of heightened uncertainty over the Iran conflict, slightly moderated by positive news on inflation.
The 30-year fixed rate mortgage increased by 6 basis points to 6.55% as of July 16 from
The last time the 30-year fixed was at a higher point was for
For the same week a year ago, the 30-year hit its summer peak of 6.75%.
Meanwhile, the 15-year FRM rose by 11 basis points from a week ago to 5.93%. This is actually higher than the 5.92% it was at for
Why did mortgage rates move this week?
"Purchase application demand has weakened recently, but
Lender Price data posted on the National Mortgage News website put the 30-year fixed just shy of 6.8% as of 11 a.m. on July 17.
At the same time, the 10-year Treasury yield was at 4.58%, up 3 basis points on the day. On July 9, it closed at 4.54%. It posted intraday highs on Monday, Tuesday and Wednesday this week above 4.61%.
The now-ended ceasefire with Iran likely
"Renewed fighting also means inflation fears are back on, so that June data is looking less like the beginning of a recovery and more like a memory of what could have been," Wood said. "No one's
The case for no Fed short-term rate increase
Louis Navellier, an investment banker, is taking a more upbeat view of the Fed's next move.
"There is no more talk about the Fed raising key interest rates in the wake of the CPI report," Navellier wrote in a Wednesday commentary. "The June Consumer Price Index came in better than economists expected and posted a 0.4% decline, which is the first time the CPI declined since 2020."
Kara Ng, senior economist at Zillow Home Loans, agreed with Navellier that the CPI, along with the Producer Price Index, being substantially cooler than indicated, takes the pressure off for a Fed rate hike in the near term.
But increased inflation from the renewed Iran conflict caused Zillow to change its rate forecast.
It now calls for the 30-year "to ease only gradually, drifting to roughly 6.4% by the end of 2026," Ng said in a Wednesday evening commentary.
Why June's positive housing data might not last for long
Zillow's June housing report had a log of good news, with sales and new listings higher, while monthly mortgage payments moved lower, which created a modest affordability boost for buyers, Ng said.
"That tailwind gets harder to lean on in the second half of the year," she continued. "If rates end 2026 near 6.4%, that would be slightly higher than the range buyers saw in fall and winter 2025 — meaning affordability could shift from a tailwind relative to last year to more of a headwind, especially when comparing listings and sales."
The Mortgage Bankers Association's Weekly Application Survey had the conforming 30-year FRM at 6.65% for the period ended July 10. This is a gain of 7 basis points from the prior week.
"Mortgage rates increased last week to their highest level since last August, continuing to dampen borrower demand," a Thursday morning commentary from Bob Broeksmit, president and CEO said. This contributed to a 7% weekly decline and 2% annual drop off in applications.
"With housing inventory continuing to improve, borrower demand should strengthen once mortgage rates begin to move lower again," Broeksmit continued.
Refi volume surprisingly strong
Even though application volume fell 2.7%, refinance activity was up 4% from the previous week and 7% from the prior year.
In a comment issued after the Freddie Mac survey release, Kyle Bass, production business manager at Refi.com, said the volume increase in this activity even after rates rose is notable because it shows it is not all falling rate driven.
"In addition to those homeowners jumping in to refinance when rates retreat, there is another group of homeowners refinancing strategically," Bass said. "Their focus is accessing the equity they've built through a cash-out refinance."
