Mortgage Rates Climb as Trump Ends Iran Ceasefire

US mortgage rates rose this week, with the benchmark 30-year fixed rate increasing to 6.49% from 6.43%, according to Freddie Mac. The surge follows a declaration by Donald Trump on July 8 that the ceasefire with Iran had ended, coinciding with renewed US bombing strikes. This geopolitical instability triggered a bond market sell-off that pushed the 10-year Treasury yield to 4.60% and drove up crude oil prices, stoking inflation fears.

Borrowing costs for 15-year fixed-rate mortgages also climbed to 5.82%. Analysts note that while rates had appeared poised for a retreat, the conflict with Iran has put them back on an upward trajectory. The Federal Reserve has maintained a hawkish stance, though Chairman Kevin Warsh previously stated that current policy is too restrictive for housing growth.

Adding to the market pressure, Trump canceled the signing of a bipartisan housing affordability bill on Wednesday, conditioning his support on the passage of his elections bill. These factors have contributed to a nationwide housing slump. The National Association of Realtors reported that existing home sales remained well below historic annual norms, with a 2.4% decline in contract closings for June.