By Ann Saphir
April 2 (Reuters) – The average rate on the most popular home-loan rate rose to its highest since early September, as the Iran war pushes up oil prices and fans inflation fears, lifting U.S. bond yields that closely influence mortgage rates.
The 30-year fixed mortgage rate averaged 6.46% last week, mortgage finance agency Freddie Mac said on Thursday, up almost a half a percentage point from just before the February 28 start of the Iran war.
The conflict has effectively blocked shipments of about a fifth of the world’s oil supply and much of its fertilizer supplies through the Hormuz Strait, fueling global concern that higher energy and food prices will push up prices more generally and force central banks into tighter monetary policy. Oil prices rose to around $110 a barrel after President Donald Trump on Wednesday said U.S. strikes would continue for another couple of weeks and suggested he would leave the job of securing safe passage for ships through the Hormuz Strait to other nations. Mortgage rates track the benchmark 10-year Treasury yield, which has surged since the Middle East crisis began. Higher mortgage rates, which make homes less affordable for buyers, come just as the housing market enters what is its typically busiest buying and selling season. The Trump administration had sought to address affordability challenges by having Freddie Mac and Fannie Mae buy mortgage-backed securities, a plan that had helped push the 30-year rate down to 5.98% last month.
(Reporting by Ann Saphir, Editing by Franklin Paul and Chizu Nomiyama)
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