What happened to mortgage rates this week?
The Freddie Mac 30-year fixed mortgage rate ticked up 5 basis points to 6.76%, the highest level since June 2025. The conflict in Iran continues to keep oil prices and inflation expectations elevated, pushing Treasury yields toward their highest levels in more than a year. Each round of renewed tensions has reinforced the same dynamic that has driven rates higher since late February. Oil prices rise, inflation fears follow, and bond markets reprice accordingly.
August’s jobs report came in above consensus expectations, with payrolls increasing 162,000 and prior months revised upward, but the strong print barely moved the odds of a rate hike at the September FOMC meeting. The Fed’s attention, along with the bond market’s, is almost entirely on inflation right now. That puts this week’s CPI release in the spotlight as the decisive data point ahead of the September 15-16 meeting. A hotter-than-expected reading would strengthen the case for a hike and add further pressure on mortgage rates. A cooler one could offer some relief, though the odds of a hike are already split nearly down the middle.
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What does this mean for the housing market?
On the housing side, August data showed pending sales growth turned negative for the first time since last November. Pricing and delisting trends, while slightly more encouraging, haven’t been enough to offset the drag from elevated rates. Normal seasonal patterns will weigh on activity into fall as well. The market that could have been, with rates below 6% and spring momentum building, feels increasingly distant. Until there is meaningful relief on inflation or a durable resolution to the conflict in Iran, that backdrop is unlikely to change.
