Mortgage rates rose again Thursday, climbing for the fifth consecutive week as the war in Iran enters its second month, fueling market instability and driving up oil prices.
The average rate on 30-year fixed home loans climbed to 6.46% for the week ending April 2, up 8 basis points from 6.38% the week before, hitting a seven-month high, according to Freddie Mac. For perspective, rates averaged 6.64% during the same period in 2025.
"The 30-year fixed-rate mortgage edged up, averaging 6.46% this week," said Sam Khater, Freddie Mac's chief economist. "With spring homebuying season in full swing, aspiring buyers should remember to shop around for the best mortgage rate, as they can potentially save thousands of dollars by getting multiple quotes."
In his primetime address to the nation Wednesday night, President Donald Trump warned of escalating military action against Iran in the "next two to three weeks" while providing no concrete exit strategy. Following his remarks, the price of a barrel of West Texas Intermediate jumped 10%, hitting $110 a barrel for the first time in over three weeks.
However, treasury yields and mortgage rates drifted lower in the wake of Trump's statement.
For the housing market, Realtor.com® senior economic research analyst Hannah Jones says that the continuing ascent in mortgage rates means that today’s homebuyers face a monthly payment about $100 higher compared to buyers a month ago, when rates were below 6%, assuming a 10% down payment on the March median-priced home.
"This fast-changing mortgage math, combined with general economic uncertainty, could keep more buyers on the sidelines as the typically-busy spring market gets into full swing," says Jones.
The March housing data shows a balanced national housing market, with home prices either flat or falling year-over-year in 34 of the 50 largest U.S. metros. According to Jones, this signals that sellers are adjusting expectations to current conditions, and buyers in many areas have more negotiating power than they have had in years—a dynamic that could partially offset the affordability pressure from higher rates.
At the same time, inventory continues to gradually improve, giving shoppers more options.
"Looking ahead, further rate volatility will likely continue to hinder the housing market," notes Jones.
However, she says that if the conflict in the Middle East is actually coming to a close in weeks' time, as Trump’s statement suggests, mortgage rates are likely to resume their downward trajectory, returning some affordability to the market as wartime inflation fears subside.
"For now, buyers and sellers alike would be wise to stay nimble," suggests Jones. "Those who can act quickly when rates dip may find meaningful windows of opportunity in the months ahead."
How mortgage rates are calculated
Mortgage rates are determined by a delicate calculus that factors in the state of the economy and an individual’s financial health. They are most closely linked to the 10-year Treasury bond yield, which reflects broader market trends like economic growth and inflation expectations. Lenders reference this benchmark before adding their own margin to cover operational costs, risks, and profit.
When the economy flashes warning signs of rising inflation, Treasury yields typically increase, prompting mortgage rates to increase. Conversely, signs of falling inflation or weakness in the labor market usually send Treasury yields lower, causing mortgage rates to fall.
The mortgage rates you’re offered by a lender, however, go beyond these benchmarks and take some of your personal factors into account.
Your lender will closely scrutinize your financial health—including your credit score, loan amount, property type, size of down payment, and loan term—to determine your risk. Those with stronger financial profiles are deemed as lower risk and typically receive lower rates, while borrowers perceived as higher risk get higher rates.
How your credit score affects your mortgage
Your credit score plays a role when you apply for a mortgage. A credit score will determine whether you qualify for a mortgage and the interest rate you'll receive. The higher the credit score, the lower the interest rate you'll qualify for.
The credit score you need will vary depending on the type of loan. A score of 620 is a "fair" rating. However, people applying for a Federal Housing Administration loan might be able to get approved with a credit score of 500, which is considered a low score.
Homebuyers with credit scores of 740 or higher are typically considered to be in very good standing and can usually qualify for better rates, which can reduce monthly payments.
Different types of mortgage loan programs have their own minimum credit score requirements. Some lenders have stricter criteria when evaluating whether to approve a loan. Ultimately, they want to make sure you're able to pay back the loan.
