US 30-year mortgage hits 11-month high

Source Credit : Portfolio Prints

Mortgage rates in the United States edged higher again last week, pushing borrowing costs for homebuyers to their highest level since August 2025. Persistent inflation concerns among Federal Reserve officials and bond market investors have reduced hopes for near-term relief in the housing market.

According to the Mortgage Bankers Association (MBA), the average contract rate on a 30-year fixed-rate mortgage rose by 4 basis points to 6.69% in the week ending July 17. The increase brought rates back to levels last seen in the week ending August 22, 2025.



Mortgage rates have climbed by approximately 0.60 percentage points since the United States and Israel launched military strikes against Iran in late February. The conflict contributed to higher global oil prices, which have added to broader inflationary pressures across the economy. Inflation, as measured by the Federal Reserve’s preferred gauge, remains roughly double the central bank’s 2% target.

Although energy prices eased temporarily in June amid intermittent peace negotiations, the recent escalation of hostilities has pushed oil prices higher once again. The renewed surge has heightened concerns among some Federal Reserve policymakers that additional action may be required to prevent inflation from becoming more entrenched.

“Incoming data showed that inflation dropped in June, but with oil prices spiking again, that improvement seems unlikely to continue in July data, and mortgage rates are likely to remain elevated as a result,” said Mike Fratantoni, Chief Economist at the Mortgage Bankers Association.

The Federal Reserve is scheduled to meet next week. While another rate increase remains a relatively low-probability outcome in the near term, interest-rate futures markets are increasingly pricing in at least one 25-basis-point hike before the end of the year. Investors expect policymakers to maintain a cautious stance as inflation continues to exceed the central bank’s target.

For prospective homebuyers, developments in the Treasury market may prove even more important than the Fed’s immediate policy decisions. Mortgage rates are closely tied to yields on longer-term government bonds, particularly the 10-year Treasury note. That yield has risen by more than a quarter percentage point since late June and closed Tuesday at its highest level in two months, signaling that borrowing costs could remain elevated even without an immediate Fed rate hike.