The 30-year mortgage rate is up 6 basis points on the back of tensions with Iran
An increase of a few basis points can add hundreds of dollars to a monthly mortgage payment.
The conflict between the U.S. and Iran is driving mortgage rates up, adding hundreds of dollars a month in extra costs for prospective home buyers.
The 30-year mortgage rate inched up by 6 basis points on Thursday, to 6.49%, on the back of renewed tensions with Iran.
Mortgage rates are sensitive to political news. The 30-year rate rises and falls in tandem with the 10-year Treasury yield BX:TMUBMUSD10Y. So when investors saw tensions increasing between the U.S. and Iran, with President Donald Trump saying the cease-fire was over, they put more money into the 10-year Treasury note, which is considered a safe asset. That drove up the yield on the 10-year note, which pulled the 30-year mortgage rate along with it.
"Interest rates picked up this week as the gradual breakdown of the ceasefire with Iran has stoked fears of further inflation and geopolitical instability," Joel Berner, a senior economist at Realtor.com, said in a statement.
(Realtor.com is operated by News Corp subsidiary Move Inc.; MarketWatch publisher Dow Jones is also a subsidiary of News Corp.)
"The primary mechanism by which the war in Iran has contributed to inflation, and thereby higher interest rates, is through the price of oil, which has jumped this week," Berner said. "Mortgage rates looked like they were poised for a retreat in recent weeks, but the deterioration of the situation in Iran has put them on an upward trajectory yet again."
A year ago at this time, the 30-year rate averaged 6.72%.
Home buyers are particularly sensitive to increases in mortgage rates. In June, sales of existing homes fell 2.4% from the previous month, as prospective buyers pulled back amid rising rates.
"The back-and-forth in monthly home sales activity, driven by mild fluctuations in mortgage rates, shows how sensitive home buyers are to affordability conditions," Lawrence Yun, chief economist at the National Association of Realtors, said in a press release.
"Stubbornly high mortgage rates are a big part of what's holding buyers back from making 2026 a major improvement over the past few years of home sales, as evidenced by today's pedestrian existing home sales figures, and the current situation in Iran may keep rates higher for longer," Realtor.com's Berner said.
-Aarthi Swaminathan
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July 09, 2026 12:30 ET (16:30 GMT)
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