Rising energy prices and bond yields add fresh pressure to spring homebuyers
Average US mortgage rates climbed for the third straight week, pushing the 30-year fixed rate to its highest level in more than three months. The war with Iran unsettled global markets and reignited inflation fears, driving borrowing costs higher.
The benchmark 30-year fixed-rate mortgage averaged 6.22% as of March 19. That's up from 6.11% a week earlier and the highest level since late 2025, according to Freddie Mac’s Primary Mortgage Market Survey.
The rate remains below the 6.67% level recorded a year earlier, offering only a modest break for borrowers facing still-elevated costs.
“Potential homebuyers are poised for a more affordable spring homebuying season than last with the market experiencing improvements in purchase applications and pending home sales,” said Sam Khater, Freddie Mac chief economist.
Freddie Mac’s survey, which tracked conventional, conforming, fully amortizing loans for borrowers with excellent credit putting 20% down, also showed the average 15-year fixed rate at 5.54%, up from 5.50% a week earlier.
Geopolitics pushed up oil and yields
The Iran war disrupted energy supplies and pushed oil prices sharply higher, with Brent crude climbing well above $100 a barrel. That fueled expectations of renewed inflation and fewer near-term Federal Reserve rate cuts.
Treasury yields rose in response, with the 10-year note climbing to 4.27% at midday Thursday, up from around 4.13% a week earlier.
Mortgage rates typically track the 10-year Treasury yield. Investors have demanded higher compensation for inflation risk tied to surging energy costs. The combination pushed borrowing costs up for the third consecutive week.
Oxford Economics analyst John Canavan says rising Treasury yields and mortgage rates reflect geopolitical risk tied to the Iran war. He notes the longer‑term rate path will depend on oil prices, inflation expectations, and Fed policy.https://t.co/TvIkrPLVSh
— Mortgage Professional America Magazine (@MPAMagazineUS) March 18, 2026
Confidence and affordability under strain
In the UK, brokers recently told Mortgage Introducer that Iran-related volatility in funding markets have already fed through into higher fixed mortgage pricing, with one adviser warning the episode has “made everyone’s life hell” and exposed how fragile the recovery remains.
Another broker said the war would “certainly knock borrower confidence” by driving up inflation beyond swap-rate effects.
US mortgage professionals face similar cross-currents. Purchase applications picked up in early March even as rates moved higher, suggesting demand from borrowers who have adjusted to a 6% handle and were trying to get ahead of further increases.
However, the broader housing market remains subdued compared with pre-2022 sales levels, with many owners still locked into pandemic-era sub-3% loans and reluctant to list.
With financing costs rising again and geopolitical risks clouding the outlook, brokers and lenders are preparing clients for a spring market defined less by rate relief and more by volatility.
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