Iran war hits housing market as mortgage rates rise to 6%
Summary
Mortgage rates in the U.S. have risen slightly to 6% due to concerns about inflation linked to the war in Iran. Higher oil prices and rising bond yields are pushing up borrowing costs, which may affect housing demand.Key Facts
- The average 30-year fixed mortgage rate increased to 6% from 5.98% last week.
- Mortgage rates are still lower than a year ago, when they exceeded 6.6%.
- Inflation worries tied to the Iran war are causing bond yields, especially on the 10-year Treasury note, to rise.
- Higher oil prices have resulted from slowed shipments through the Strait of Hormuz, a key oil route.
- Gasoline prices in the U.S. have increased by 26 cents per gallon since last week, reaching $3.25 on average.
- Inflation concerns may influence the Federal Reserve's future decisions on interest rates.
- Higher mortgage rates could discourage some potential homebuyers.
- Investors are moving from bonds to other safe investments like money market funds due to economic uncertainty.
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