Mortgage rates jump as Iran conflict hits housing market

Mortgage rates spiked this week as the conflict in Iran continues to weigh on markets, mortgage buyer Freddie Mac said Thursday.

Freddie Mac’s latest Primary Mortgage Market Survey, released Thursday, showed the average rate on the benchmark 30-year fixed mortgage rose to 6.38% from last week’s reading of 6.22%. 

The average rate on a 30-year loan was 6.65% a year ago.

“The housing market continues to show gradual improvements compared to a year ago amid recent rate volatility,” said Sam Khater, Freddie Mac’s chief economist. “Purchase and refinance applications are up year-over-year.”

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The average rate on a 15-year fixed mortgage climbed to 5.75% from last week’s reading of 5.54%.

Mortgage rates are affected by several factors, including the Federal Reserve and geopolitics. Though mortgage rates are not directly affected by the Fed’s interest rate decisions, they closely track the 10-year Treasury yield. The 10-year yield hovered around 4.38% as of Thursday afternoon.