Geopolitical tensions are impacting America’s housing market, adding to the financial strain on homebuyers. The average rate on a 30-year fixed mortgage has climbed to 6.55%, its highest level in nearly a year, following renewed strikes in Iran.

Economic Impact

The increase in mortgage rates is expected to keep would-be buyers out of the market. Pending home sales in June fell by 5.4% month-over-month and by 0.3% since last year, according to a report from the National Association of Realtors.

Mortgage applications also fell 7% last week and were 2% lower than last year, according to data from the Mortgage Bankers Association. The brief stop in fighting last month led to a drop in energy prices and cooling inflation at the wholesale level.

Despite recent economic disruptions, Zillow still expects mortgage rates to drift lower, albeit not by much, to 6.4% by the end of 2026. This would still be higher than where rates ended last year, though.

Original reporting: KEYT (Ventura/Santa Barbara) — read the source article.