WASHINGTON—After hitting recent lows and sparking the home buying market, mortgage rates moved higher in the second half of March, pressured by inflation concerns and geopolitical tensions, with borrowing costs remaining below 7% but trending upward, according to two new reports.
The national average for a 30-year fixed-rate mortgage stood at 6.36%, while 15-year fixed-rate loans averaged 5.71%, according to data cited by The Wall Street Journal from Bankrate. Rates have risen from the low 6.2% range earlier in the month into the mid-6% range, the publication reported.
Separately, Mortgage News Daily reported that top-tier 30-year fixed rates have climbed above 6.5% for many lenders, marking the highest levels since early September 2025. The outlet noted rates had been as low as 5.99% as recently as Feb. 27.
Iran Conflict Playing Role
Both reports pointed to escalating conflict involving Iran as a key driver behind rising rates, with higher energy costs fueling renewed inflation concerns globally. Mortgage News Daily said the conflict has prompted central banks worldwide to reassess inflation expectations and interest rate outlooks, contributing to volatility in financial markets.
As the CU Daily reported earlier, the Federal Reserve on March 18 held its benchmark federal-funds rate steady at a range of 3.5% to 3.75%, where it has remained since December 2025. Fed Chair Jerome Powell said the current policy stance is intended to stabilize the economy while gradually lowering inflation, but warned that Middle East tensions could introduce new uncertainty into inflation trends.
Other Factors at Work
Mortgage News Daily emphasized that mortgage rates tend to react more to shifting expectations around monetary policy than to actual rate decisions, noting that rapidly changing outlooks among central banks—including the European Central Bank—have contributed to recent increases.
The rise in rates has already affected borrower behavior. The CU Daily reported earlier that refinance applications fell nearly 26% week over week as borrowing costs climbed.
Looking ahead, there may be some relief. Most Federal Reserve policymakers expect at least one rate cut before the end of 2026, according to The Wall Street Journal. However, Mortgage News Daily cautioned that a sustained return to February’s lower mortgage rates appears unlikely in the near term, even if geopolitical tensions ease.
