There are alarm bells ringing that mortgage rates are going back to 7%.
I’m seeing articles, I’m hearing from housing doomers.
Everyone seems to think mortgage rates are going much, much higher.
But then you look at a prediction market website, and the odds of a rate even above 6.9% this year is super low.
It seems like a headscratcher, but then you remember rates have already climbed a ton and could be at the top of their range.
So Close, Yet So Far Away From 7% Mortgage Rates
I brought this up earlier this month. That despite all that’s going on, mortgage rates might stay below 7%.
That seems kind of crazy given the 30-year fixed just hit a new 52-week high, 6.85%, per Mortgage News Daily.
But those odds are based on Freddie Mac’s weekly rate survey, which only has the 30-year fixed at 6.58% this week.
It’ll likely climb higher next week because it’s always delayed and hasn’t captured the latest move higher.
Even then, it might only be around 6.65%, which is still 0.375% below the dreaded 7-handle everyone’s so worried about.
So it really depends which source you use to talk about mortgage rates.
Freddie Mac is much more forgiving at the moment than MND, which tracks interest rates each day.
Essentially, MND captures all the rate movement, which can swing wildly from day to day.
Conversely, Freddie Mac data is smoothed because it’s only reported once a week and as such it misses things.
For example, if rates calm down early next week and build off today’s slight improvement, Freddie Mac may not even report higher rates in its next survey release.
The 30-Year Fixed Hasn’t Been Above 7% Since January 2025
The last time the 30-year fixed was above 7% was in mid-January 2025, per Freddie Mac.
Meanwhile, the 30-year fixed registered a few days above 7% as recently as May 2025 according to MND data.
This is perhaps why the odds are so low of the 30-year fixed getting back to 7% according to Freddie Mac.
Still, it makes you wonder given the tensions in the Middle East and the surging price of oil (and bond yields).
We aren’t all that far off if things don’t improve, even if Freddie’s data is playing catch-up.
If the conflict gets worse and/or economic data comes in hot, it’s certainly not out of the question.
Mortgage Rates Are Already Up Nearly 1% Since the Conflict Began
However, one thing working in favor of mortgage rates is the fact that they’ve already risen nearly one percentage point since the conflict began.
So it’s not like bond investors and MBS investors aren’t aware of what’s happening.
They’ve already priced in the Iranian conflict, the higher oil prices, and the inflation that comes with it.
Had mortgage rates not budged, sure, you’d worry they could go up a lot more from here.
But they’re at 52-week highs and only about 20 basis points (0.20%) from two-year highs.
In other words, the risk is baked in to mortgage rates. Can they go even higher? Yes.
However, it gets harder for them to keep going up once they’ve already gone up. And actually creates a scenario where there’s more room to fall, assuming things ease up in the Middle East.
Everyone knows things are bad there and interest rates have adjusted in response. If things improve, rates can make their way back to pre-conflict levels over time.
Lastly, there’s the old adage that the cure for high prices is high prices.
This typically applies to commodities like oil, where high prices destroy demand and lead to increased supply.
That’s one way for prices to come down.
With regard to home loans, eventually demand drops off and lenders will need to pass along discounts (or reduce margins) to drum up business.
And my guess is banks and lenders are well aware that a 7% mortgage rate looks terrible and will do their absolute best to avoid it.
Keep going: Give my mortgage rate calculator a whirl to quickly compare different interest rates.
Before creating this site, I worked as an account executive for a wholesale mortgage lender in Los Angeles. My hands-on experience in the early 2000s inspired me to begin writing about mortgages 20 years ago to help prospective (and existing) home buyers better navigate the home loan process. Follow me on X for hot takes.