Mortgage Rates Drop to 6.3%, but Uncertainty Over Iran Conflict Limits Spring Housing Market Recovery

The average 30-year fixed-rate mortgage in the U.S. fell to 6.3% this week, the lowest level since March 19, when it was 6.22%. The decline follows a two-week ceasefire in the war with Iran, which initially pushed the 10-year Treasury yield to 4.29% from 4.34%. The 10-year Treasury yield is a key benchmark for mortgage pricing and had risen to 4.29% in midday trading. The war with Iran caused energy prices to surge, raising inflation concerns and pushing mortgage rates up from 5.85% in late February to a peak of 6.37%. The U.S. housing market remains in a slump, with previously owned home sales at a 30-year low and no clear recovery in sight. Consumer confidence in the job market has weakened, compounding the effect of high borrowing costs on the spring homebuying season. Economists expect mortgage rates to remain volatile due to ongoing uncertainty about the war's resolution.