Aerial view of San Francisco homes, August 27, 2025.
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Mortgage rates hit their lowest level in years, below 6%, before reversing on Monday and hitting their highest level in two weeks.
The average interest rate on the popular 30-year fixed loan rose 13 basis points to 6.12%, according to Mortgage News Daily. It fell to a recent low of 5.99% on February 23, and has remained at that level for most of the time since then.
The drop was welcome news as the all-important spring housing market gets into full swing. Rising home prices and concerns about the overall economy are deterring potential buyers. As mortgage rates hit the 5% range, the emotional barrier for some people is lifted, suggesting buyers may jump at the opportunity.
Mortgage rates have roughly tracked the yield on the 10-year U.S. Treasury, which rose again to more than 4% on Monday. The escalation of the conflict with Iran has caused oil prices to soar, raising concerns about inflation and pushing up yields.
But oil prices may not be the cause of rising mortgage rates, according to Matthew Graham, chief operating officer of Mortgage News Daily.
“In fact, bonds were flat until 7 a.m., compared to Friday’s CME close of 3 p.m. At that point, oil had already experienced nearly all of the day’s volatility,” Graham said in emailed comments to CNBC. “The crux of the bond sell-off unfolded in a vacuum. Friday’s yields strongly suggest a drag on end-of-month buying, positioning this morning’s sell as a ‘new moon.’
This supports the possibility that the bond market views Monday’s move as a technical rebound at the 4% level for 10-year Treasuries, Graham said. This means it could be more difficult to cut interest rates without meaningful incentives from a number of economic data coming out this week, including the monthly jobs report on Friday.
