Mortgage Rates Increase Due to Trump’s Iran War And Inflation Concerns

(AP Photo/Matt Rourke, File)

The war with Iran has caused mortgage rates to balloon, placing the dream of home ownership further out of reach for many Americans, according to The New York Times.

The average 30-year fixed-rate mortgage rate in the United States rose to 6.11 percent, marking the second week in a row that rates have gone up, the report said.

“The average had slipped below 6 percent for the first time in years in late February, raising confidence among buyers and sellers that the long-frozen market might finally begin to loosen,” the report said, continuing:

Days later, the United States and Israel attacked Iran, setting off an energy crisis and raising new inflation concerns in financial markets. The result has been a jump in the yield on government bonds, and falling expectations for interest-rate cuts later this year. The yield on the 10-year Treasury note, which acts as a broad reference interest rate that underpins the U.S. mortgage market, climbed to 4.25 percent on Thursday, up from below 4 percent before the war began.

The Times noted that even at 6.11, “rates are well below their recent peak of 7.8 percent in October 2023, which was the highest level in decades.”

Hannah Jones, a senior economic research analyst at Realtor.com, told The Times,  “This definitely feels like we’re back where we were a year ago: tariff uncertainty, economic uncertainty, geopolitical uncertainty. All of this is making the path ahead seem really unclear.”

The report continued, “With borrowing costs elevated, the high prices are keeping middle- and low-income buyers on the sidelines while wealthier households and investors are playing a larger role in the market.”

“Investors accounted for 30.2 percent of home purchases in 2025, nearly double their share at the start of the pandemic, according to data from Cotality. A report from Realtor.com found the change wasn’t because of a surge of investor activity, but rather a pullback from traditional buyers who could no longer afford today’s prices,” the report said.

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