Treasury Selloff Drives Mortgage Rates Near 7% as Iran Tensions Rise
Geopolitical tensions involving Iran are pushing up Treasury yields and mortgage rates across the US.
Thirty-year mortgage rates reached an average of 6.6% last week, according to Freddie Mac data.
The shift is raising costs for homebuyers and car purchasers, reports The Wall Street Journal, with analysts expecting those rates to approach 7% and further reduce affordability for first-time buyers.
Low housing inventory is already limiting sales and keeping prices elevated, and higher yields are jacking up construction expenses for new rental units.
Auto loans tied to five-year Treasury yields are climbing as well, prompting longer repayment terms for many borrowers.
In addition, national gasoline prices now average 4.10 dollars per gallon.
Inflation measured at 3.7% in July, raising the odds of a Federal Reserve rate increase this month.
The moves are also hitting stocks tied to artificial intelligence investments, which face pressure as higher yields compete with equities for investor funds.
Overall, private spending on data centers has risen sharply while other construction categories declined.
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