Mortgage rates climb to highest level since July amid war concerns

Investing.com -- The average rate on the 30-year fixed mortgage rose 7 basis points on Tuesday to 6.75%, according to Mortgage News Daily. This marks the highest level since July 31.

Rates have increased 33 basis points over the past 10 days and are now 46 basis points higher than their recent low of 6.29% in April.

The April decline followed a sharp increase at the start of the war with Iran, when rates jumped from 5.99% at the beginning of March to 6.64% by the end of the month.

Matthew Graham, chief operating officer at Mortgage News Daily, said bonds are signaling to politicians to address ending the war or face increasingly severe consequences.

The increase from 5.99% to 6.75% represents a substantial change in housing affordability. For a buyer putting 20% down on a $420,000 home, roughly the national median home price, the monthly principal and interest payment has risen from $2,012 to $2,179, a difference of $167.

Homebuilders show slightly less sensitivity to rate movements, as they have been buying down mortgage rates to attract buyers. Current rates remain lower than a year ago, when they exceeded 7%.

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