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After appearing to finally have some relief from high interest rates on mortgages, the rates went even higher! This is all because of renewed conflict abroad.
Rates Tick Up This Week
The interest rate on a 30-year fixed mortgage climbed to 6.49% during the week ending July 9, 2026.
That is an increase of 6 basis points compared to the 6.43% that was seen one week earlier. Not much, but painful to those who are trying to buy a house.
The better news? It was higher a year ago – in the same week last year, the average was 6.72%.
Why Did Rates Climb?
The problem lies overseas. U.S. relations with Iran have fallen apart this week following mutual airstrike assaults from both nations.
The incident sparked panic in the market, driving oil prices skyward. Crude oil prices in the U.S. rose to $76 a barrel — a record daily increase since early June!
Rising oil prices mean increased inflation. And when inflation gets hot, so do interest rates.
What Happens Next?
Experts had been predicting rates would fall recently. The renewed conflict changed that prediction quickly.
- The Federal Reserve is unlikely to push rates down, even after a soft jobs report.
- Last week’s 6.43% may now be the lowest rate we’ll see for a while.
- If Middle East tensions keep building, rates could stay high even longer.
Forecast from mid-year 2026 suggested low interest rates and increased home sales. Such an optimistic prediction is no longer safe.
Bright Spots for Buyers
Don’t lose heart! The market has actually shifted in your favor this year:
- Prices are falling in many areas
- Inventory is growing, giving you more choices
- Homes are sitting longer, so there’s less pressure to rush
Slowing price growth will be positive for affordability. High interest rates continue to discourage some buyers, but the trends are on your side.
How Mortgage Rates Are Set
Curious what drives your rate? A few big factors come into play:
- The economy: Rates track closely with the 10-year Treasury bond yield.
- Inflation: Rising inflation usually pushes rates up. Cooling inflation pulls them down.
- Your finances: Lenders check your credit score, loan size, down payment, and loan term.
Financial strength often results in better rates. Having a credit score above 740 will put you in good stead for getting the best deals.
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