The past month has been really rough for mortgage rates, but we could be near a top.
The 30-year fixed has risen from around 6.875% in early August to 7.25% today.
However, the move higher could be running out of steam given the big increase in such a short period of time.
What will dictate the next move will largely depend on what happens in the Middle East, as the conflict and oil prices have been the main driver this year.
If you recall, the 30-year fixed was below 6% for the first time since 2022 before the war began in late February.
Mortgage Rates Have Gone Up a Lot Recently
It’s been a very bad month for mortgage rates. One of the worst in recent memory in fact.
While there are always periods where rates rise and drop, there’s been a sharp increase over the past 30 days and change.
If you look at this chart from Mortgage News Daily, you’ll see that rates went parabolic recently.
The 30-year fixed is now averaging around 7.25%, which is the highest level seen since early 2025.
Assuming rates get even worse from here, they’d be the highest since spring of 2024.
The worst part is that the 30-year fixed was the best it had been since mid-2022 as recently as early March.
That’s right. We had the best mortgage rates in four years heading into the spring home buying season.
Then the conflict began. Without warning, oil prices shot higher and so too did mortgage rates.
There has been some ebb and flow, but it’s mostly been up, up, up ever since.
Since the war began, the 30-year fixed is up about 125 basis points (1.25%). Ouch!
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Mortgage Rates Can Come Back Down Under the Right Conditions
So we know mortgage rates have gone up a lot recently. As noted, more than a full percentage point.
They’re also now about one full percentage point above their year-ago levels, which is yet another massive headwind for the ailing housing market.
But what if mortgage rates are at/near a top? What if they’ve already done the climbing they’re going to do?
What if they’ve priced in the $100/barrel oil and the conflict and its effects on inflation?
It’s entirely possible they’re at a top and could begin to unwind the move higher over time.
The answer to that question though will depend upon what happens in the Middle East.
It’s pretty clear from the mortgage rate chart above that the increase in rates was driven by the war.
That means the most logical way for mortgage rates to come back down again is for the war to end.
Or for positive developments to take place that lead to lower oil prices and a sense that a peace deal is near.
There is chatter again that President Trump could meet up with the President of Iran, who will apparently attend the United Nations General Assembly in NYC this week.
If that happens and it’s somehow positive, oil prices could continue to retreat and so too could mortgage rates.
That’s what you want to keep an eye on right now if you’re curious if mortgage rates are going up or down.
Before creating this site, I worked as an account executive for a wholesale mortgage lender in Los Angeles. My hands-on experience in the early 2000s inspired me to begin writing about mortgages 20 years ago to help prospective (and existing) home buyers better navigate the home loan process. Follow me on X for hot takes.
