Rising mortgage rates hit US homebuyers

Prospective American homeowners are being hit by the indirect effects of the Iran conflict: inflationary expectations are making mortgages more expensive.

An average US household will pay half a percentage point more in interest on a new mortgage than they would have on Feb. 27, data from Freddie Mac show – even though the Fed has kept rates steady this year. The 30-year fixed mortgage rate has surpassed 6.5% again, a level unseen since September. Mortgage applications have weakened as affordability deteriorates.

Mortgages are priced against 10-year and 30-year Treasury yields that have climbed back toward multi-decade highs. Concerns about US fiscal sustainability haven’t helped.