Mortgage Rates Today, Wednesday, July 8: Back on the Rise

The average interest rate on a 30-year, fixed-rate mortgage rose to 6.39% APR on Wednesday, reversing a recent decline, as the collapse of a U.S.-Iran ceasefire sent bond yields and oil prices higher.

The rate, provided to NerdWallet by Zillow, is three basis points higher than the previous day but one basis point lower than a week ago ^[1][2]. A basis point is one one-hundredth of a percentage point. The increase follows the apparent breakdown of the U.S.-Iran ceasefire. President Trump said he believes the ceasefire is over, a statement that has already pushed oil prices upward ^[2].

Mortgage rates are influenced by the Federal Reserve's policy decisions, though the central bank does not set them directly ^[1][2]. The Fed focuses on two main goals: price stability and maximum employment ^[1][2]. It generally raises the federal funds rate to slow inflation ^[1]. Higher interest rates discourage business borrowing and expansion, which can also slow hiring ^[1].

Throughout the spring, mortgage rates were highly sensitive to events in the Middle East as bond markets wrestled with inflation fears ^[1]. More recently, a durable ceasefire had shifted market attention back to domestic economic data and Federal Reserve updates ^[1]. The latest geopolitical developments have already sent bond yields higher, and mortgage rates are likely to follow ^[1]. The escalation may also shift the Federal Reserve's outlook, especially if tensions continue to rise ^[1].

Mortgage rates change constantly based on reactions to new inflation reports, job numbers, Fed meetings, and global news ^[1]. Even small shifts in the bond market can move mortgage pricing ^[1].