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US Mortgage Rates Soar to 7.28% Amid Inflation and Iran War Fallout
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Firstpost•02-10-2026, 06:50
US Mortgage Rates Soar to 7.28% Amid Inflation and Iran War Fallout
- •US 30-year fixed mortgage rates jumped to 7.28%, the highest in nearly three years, driven by rising Treasury yields and persistent inflation.
- •The increase marks the biggest weekly rise in about four years and the sixth consecutive weekly climb, with 15-year fixed rates also rising to 6.60%.
- •The Iran war has fueled higher global energy prices, contributing to inflationary pressure and pushing mortgage rates up by over 1.2 percentage points since the conflict began.
- •Higher rates are weakening homebuyer demand, leading builders to offer incentives like discounts and price cuts to stimulate sales.
- •Some borrowers are exploring adjustable-rate mortgages (ARMs) or assumable mortgages, while others pay upfront to temporarily or permanently lower their interest rates.
Key Questions Answered
US mortgage rates surged to 7.28 percent due to a sharp rise in government bond yields, persistent inflation above the Federal Reserve's target, and economic pressures from the war involving the US, Israel, and Iran which drove up global energy prices.
Builder confidence fell to 32 in September as higher rates weighed on buyers. In response, 66 percent of builders offered sales incentives in September, while 38 percent cut prices by an average of 6 percent.
Buyers are increasingly turning to adjustable-rate mortgages, which accounted for 10.3 percent of mortgage applications as their initial rates were about 80 basis points below fixed-rate loans. Others are considering assumable mortgages or paying upfront for rate buydowns.
