The 30-year fixed-rate mortgage (FRM) rose 7 bps to 6.75% on Tuesday, according to Mortgage News Daily. That marks the highest rate since July 2025.
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The rate is closely linked to the 10-year Treasury yield, which has climbed 18 bps over the past week amid growing concern of rising inflation. The closure of the Strait of Hormuz has lifted oil and gas prices, which in turn have boosted inflation expectations. “Bonds are telling politicians to get serious about ending the war or face increasingly dire consequences,” wrote Mortgage News Daily Chief Operating Officer Matthew Graham.
Homebuilder Stocks Slip as Pending Home Sales Grow
Homebuilder stocks, including Lennar (LEN), PulteGroup (PHM), and D.R. Horton (DHI), are trading lower on the news. With higher rates, the issue of affordability increases, pricing out potential buyers and weighing on demand for new homes.
Still, pending home sales rose 1.4% month-over-month in April amid the historically busy spring homebuying season. National Association of Realtors Chief Economist Dr. Lawrence Yun expects demand to increase even further if mortgage rates fall to levels seen earlier this year in the low 6% range.