Geopolitical tensions push U.S. mortgage rates higher

According to data released by Mortgage News Daily, the average interest rate for the popular 30-year fixed-rate mortgage in the United States rose by 13 basis points to 6.12%, marking the highest level in the past two weeks. By comparison, on February 23, it had fallen to 5.99% and remained near that level for several days.

The temporary decline in rates had created a positive sentiment in the housing market, as many prospective buyers had stayed on the sidelines due to high home prices and uncertainty about economic prospects. Market analysts noted that a return of rates to the 5% zone was considered a critical psychological threshold that could stimulate demand.

Mortgage rates generally follow the trajectory of U.S. Treasury yields, particularly the 10-year note, the yield of which returned above 4% on Monday.

Geopolitical Developments in Focus
The initial rise in yields was linked to higher oil prices amid escalating tensions with Iran, reigniting inflation concerns. However, according to Matthew Graham, COO of Mortgage News Daily, the rate movements appear to be driven more by technical factors in the bond market and portfolio adjustments at the start of the month.

He noted that the recent decline in yields was likely supported by end-of-month buying, while the current rise reflects new investor positioning, suggesting that further rate declines will require strong macroeconomic data.

Market attention is now turning to this week’s key economic indicators, particularly the monthly U.S. employment report due on Friday, which is expected to decisively influence Treasury yields and, by extension, mortgage rates.