BlockBeats reported on August 14 that the average rate on a 30-year fixed mortgage in the US climbed to 6.67% this week, the highest in more than a year. The latest reading compares with 6.43% in early July and 5.98% before the outbreak of the Iran-US war. A rise in 10-year US Treasury yields is among the main factors behind the increase. For a typical American home, the average monthly mortgage payment has risen by nearly $150 compared with the beginning of the year. Across the Atlantic, UK five-year fixed mortgage rates averaged 5.66% in July, marking the first monthly climb since April. Germany's 10-year fixed mortgage rate rose from 3.3% at the start of July to 3.7% this week, and France's 10-year fixed rate increased from 3.02% in June to 3.15% in July. Market participants tie the trend to the Iran-US conflict, which has lifted oil and energy prices, revived concerns about an inflation rebound, and pushed up funding costs such as Treasury yields and UK swap rates. The higher rate environment is dampening property transactions across the US and Europe. The 'low-rate lock-in effect' remains visible in the US, while agreed home sales in the UK fell almost 10% year on year in July.
US 30-year fixed mortgage rates hit 6.67% this week, the highest reading in over a year. BlockBeats reported the figure on August 14, noting it sits above both the 6.43% seen in early July and the 5.98% recorded before the Iran-US war began.
A recent run-up in 10-year Treasury yields is one of the main forces pushing mortgage rates higher, and the pain is visible in monthly payments. The average US mortgage payment is now nearly $150 higher than it was at the start of the year.
Europe is moving in the same direction. The average five-year fixed mortgage rate in the UK rose to 5.66% in July, the first monthly increase since April. Germany's 10-year fixed mortgage rate climbed to 3.7% this week from 3.3% in early July, while France's equivalent rate moved up to 3.15% in July from 3.02% in June.
Market participants see the Iran-US conflict as the common trigger. Higher oil and energy prices are reviving inflation fears, which in turn lifts Treasury yields, UK swap rates and other funding costs.
The higher rate environment is starting to weigh on property transactions. In the US, the so-called low-rate lock-in effect persists, and UK agreed home sales fell by nearly 10% year on year in July.
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