MW Mortgage rates jump to more than 6.5% - the highest level since the Iran war started

By Andrew Keshner

Rates hit an eight-month high but are still lower than they were a year ago

Mortgage rates climbed on Thursday.

Mortgage rates jumped sharply on Thursday, hitting their highest level since the start of war in Iran.

The average 30-year fixed-rate mortgage was at 6.51% as of Thursday, up from 6.36% one week earlier, according to Freddie Mac (FMCC). Rates were last around this level in the fall of 2025, when the average rate on a 30-year mortgage was 6.50% during the week of Sept. 4.

Mortgage rates have been volatile since the U.S. and Israel launched their attack on Iran on Feb. 28. Until Thursday, the high point for mortgage rates during the conflict was 6.46% in early April.

A tense cease-fire has held since early April, but gas prices have continued to rise. Just before the start of the conflict, mortgage rates had fallen below 6% for the first time in years, raising hopes of an active spring home-buying season.

Thursday's jump in rates comes as inflation worries continue to fuel the climb in bond yields. Mortgage rates tend to follow the yield on the 10-year Treasury note BX:TMUBMUSD10Y.

Higher mortgage rates come amid signs of strain in the U.S. economy as the conflict in the Middle East drags on.

Thursday's rates were still lower than a year ago, when they were at 6.86%.

Now the good news - sort of.

Even with higher borrowing costs in the near term, there are some glimmers of improved affordability for home buyers.

The monthly mortgage payment on a new home could be eating up slightly less of a family's income, according to the latest look at affordability from the National Association of Home Builders.

Specifically, a family making the median national income of $106,800 had to pay 32% of its income to cover the monthly mortgage on a median-priced new home in the first quarter of 2026, according to the NAHB / Wells Fargo Cost of Housing Index.

The 32% share for housing costs is down from 34% one quarter earlier. It's still not great, however: A family is considered "cost-burdened" if more than 30% of their income is spent on housing, according to the U.S. Department of Housing and Urban Development.

The hurdles are even higher for lower-income families trying to get a toehold in the housing market. Households making less than half the country's median income would have to pay nearly two-thirds of their income to afford a new home in the first quarter, the index showed.

"While affordability for both new and existing homes saw modest improvement over the past year, home buyers continue to grapple with elevated mortgage rates and economic uncertainty while home builders are dealing with rising construction costs, excessive regulations and labor shortages," NAHB Chair Bill Owens said in a statement.

-Andrew Keshner

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May 21, 2026 12:04 ET (16:04 GMT)

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