Mortgage rates are swinging upward as the real estate market heads into the spring season. Amid recent geopolitical tensions, mortgage rates rose from a 5.98% average at the end of February to 6.22% this week, according to Freddie Mac.
Economists point to growing uncertainty as a key driver.
“Mortgage rates continued to move higher, driven by increasing Treasury yields as the conflict in the Middle East kept oil prices elevated, along with the risk of a broader inflationary shock,” Joel Kan, an economist at the Mortgage Bankers Association, said in a statement earlier this week. “Mortgage rates increased across the board.”
That said, rates are still nearly a half percentage point lower than the same time last year, says Sam Khater, Freddie Mac’s chief economist. “Potential home buyers are poised for a more affordable spring homebuying season than last with the market experiencing improvements in purchase applications and pending home sales.”
Overall, mortgage rates averaged 6.05% in February, which combined with moderating home prices helped to improve housing affordability. It’s given some buyers an opening. The National Association of REALTORS®’ Pending Home Sales Index showed this week that contract signings rose 1.8% in February compared to January, a sign that more buyers are stepping back into the market.
However, Lawrence Yun, chief economist at the National Association of REALTORS®, cautions that “these conditions could reverse if higher oil prices lead to an uptick in mortgage rates.”
Fed Holds Rates Steady—for Now
At its March 18 meeting, the Federal Reserve chose to hold its benchmark short-term interest rate steady—marking the second consecutive meeting without a change.
The Fed signaled it still expects at least one rate cut in 2026, but it struck a cautious tone about the broader economy.
In its statement, the central bank noted that developments in the Middle East could impact the U.S. economy, but it added that rising gas prices tied to the conflict are expected to have only a temporary effect on inflation. The Fed now projects inflation may not return to its 2% target until 2028.
While the Fed doesn’t directly set mortgage rates, its decisions influence Treasury yields, which mortgage rates are closely tied to.
Mortgage Rates This Week
Freddie Mac reported the following national averages with mortgage rates for the week ending March 19:
- 30-year fixed-rate mortgages: averaged 6.22%, up from last week’s 6.11% average. A year ago, 30-year rates averaged 6.67%.
- 15-year fixed-rate mortgages: averaged 5.54%, rising slightly from last week’s 5.5% average. A year ago, 15-year rates averaged 5.83%.
