US mortgage rates have climbed to their highest level in 12 months, driven by rising Treasury yields in recent weeks and persistent worries about inflation fueled by the ongoing conflict in Iran.

Freddie Mac announced on Thursday that the average rate on a 30-year fixed-rate mortgage increased to 6.66%, up from 6.58% the previous week. This marks the highest point since July 31, 2025, when the rate stood at 6.72%.

Elevated borrowing costs have continued to weigh on the housing market in recent months. The 30-year mortgage rate briefly dipped below 6% in late February, but a subsequent spike in energy prices, triggered by the Middle East conflict, pushed rates back up.

The war has dampened spring home sales, contributing to a sustained weakening in the real estate market. Data from real estate brokerage Redfin shows that in the four weeks ending July 26, the number of home purchase agreements fell to its lowest level since early April.