{"id":17178,"date":"2025-06-24T06:49:38","date_gmt":"2025-06-24T06:49:38","guid":{"rendered":"https:\/\/finderica.com\/?p=17178"},"modified":"2025-06-24T06:49:38","modified_gmt":"2025-06-24T06:49:38","slug":"mortgage-rates-move-lower-despite-evolving-iran-conflict","status":"publish","type":"post","link":"https:\/\/finderica.com\/?p=17178","title":{"rendered":"Mortgage Rates Move Lower Despite Evolving Iran Conflict"},"content":{"rendered":"
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While one may have worried that mortgage rates would move higher after the U.S. bombed Iran nuclear facilities, so far things have gone the other way.<\/p>\n

Perhaps it helped to have a day or two to assess the impact and the ramifications.<\/p>\n

One being the cost of oil, which could rise if Iran decides to close the Strait of Hormuz and disrupt the flow of ships through the narrow channel.<\/p>\n

However, many seem to think such a move would be unlikely, and that any spike in oil prices would be short-lived.<\/p>\n

Indeed, oil prices were falling today as 10-year bond yields also eased, meaning the 30-year fixed mortgage will also be cheaper today.<\/p>\n

Bond Yields Lowest Since Early May, Mortgage Rates Should Follow<\/h2>\n

\"10-yr<\/p>\n

At last glance, the 10-year bond yield, which serves as a bellwether for 30-year fixed mortgage rates, was the lowest<\/a> it has been since early May.<\/p>\n

It was down about seven basis points to 4.30%, not far from the lowest levels of 2025 other than a couple blips along the way.<\/p>\n

That will translate to lower mortgage rates as well, though it won\u2019t signal any major relief.<\/p>\n

And given the situation at hand, which can evolve and shift directions quickly, I can\u2019t imagine mortgage lenders will get too loose on pricing.<\/p>\n

Even if lower bond yields mean mortgage rates should be lower, we might see muted movement and higher mortgage rate spreads to account for increased uncertainty.<\/p>\n

In other words, don\u2019t get your hopes up that things are going to change much, especially with tariffs still an issue and the big beautiful bill also outstanding.<\/p>\n

In terms of what\u2019s driving bond yields (and mortgage rates) lower, it\u2019s the thought that despite the bombing in Iran, further escalation may not actually transpire.<\/p>\n

As such, oil prices won\u2019t go up and thereby exacerbate inflation. Meanwhile, a second Fed official, Bowman (joining Waller) has called for rate cuts sooner<\/a>.<\/p>\n

The gist is the tariffs won\u2019t be as much of an inflation issue as some expect, and action is needed to support the labor market before it deteriorates further.<\/p>\n

Put another way, labor over inflation. But given the Iran situation is very fluid, mortgage rates could be quite choppy in the near term.<\/p>\n

Whether mortgage rates can finally break out (lower) is another question.<\/p>\n

Will Mortgage Rates Remain Range Bound?<\/h2>\n

\"range<\/p>\n

Other than that early April swoon, in which the 30-year fixed slipped close to 6.50%, mortgage rates have been very range bound.<\/p>\n

They\u2019ve basically just hovered close to 7%, though they\u2019re doing a good job of staying below that key psychological level.<\/p>\n

But basically kind of stuck between 6.75% and 6.875%, meaning not a whole lot of movement, as seen in this chart from MND<\/a>.<\/p>\n

And not a lot of relief for anyone looking for a rate and term refinance, or a deal as a home buyer.<\/p>\n

However, every little bit helps right now to get sluggish buyers to bite, with home sales experiencing another rough year after a dismal 2024.<\/p>\n

So buyers might see a .125% improvement in rate, or 6.75% instead of 6.875%, or perhaps lower closing costs as a result.<\/p>\n

That probably won\u2019t be enough to save home sales this year, though there are still six months left in 2025.<\/p>\n

And the 2025 mortgage rates forecasts did call for rates closer to 6% by later this year. It\u2019s still a possibility if we can get through tariffs and the big beautiful bill, and now Iran.<\/p>\n

Just expect the usual ebb and flow along the way as bond traders struggle with a lot of different issues all at once.<\/p>\n

Home Sales Experience Worst May Since 2009<\/h2>\n

Speaking of home sales, the National Association of Realtors reported<\/a> today that existing home sales increased 0.8% in May from a month earlier.<\/p>\n

However, that still marked the slowest month of May since 2009<\/a>, and sales were down 0.7% year-over-year on a continued lack of affordability.<\/p>\n

Interestingly, sales increased month-over-month in all regions other than the West, where they fell 5.4%. That seemed to be the key area of weakness.<\/p>\n

Despite flagging sales, the median sales price hit yet another record high for the month of May, $422,800, up 1.3% from a year ago ($417,200).<\/p>\n

It also marked the 23rd consecutive month of year-over-year price increases.<\/p>\n

But there are legitimate concerns that home prices could begin to feel some pressure if mortgage rates remain sticky-high.<\/p>\n

NAR noted that total housing inventory increased a further 6.2% from April and a whopping 20.3% from May 2024.<\/p>\n

Granted it\u2019s still at relatively low levels so the numbers might look a bit more dramatic than they actually are.<\/p>\n

The good news is we\u2019re seeing more equilibrium in the housing market, with total supply now at 4.6 months, up from 4.4 months in April and 3.8 months in May 2024.<\/p>\n

That\u2019s getting pretty close to what many consider a normal amount of supply, meaning buyers and sellers should be better aligned.<\/p>\n

The result could be more wiggle-room on pricing if you\u2019re a buyer, and a bit more pressure to list lower if you\u2019re a seller.<\/p>\n

In addition, home buyers can ask for seller concessions, perhaps to pay for buying down their mortgage rate to more palatable levels.<\/p>\n

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\"Colin<\/div>\n
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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 19 years ago to help prospective (and existing) home buyers better navigate the home loan process. Follow me on X for hot takes.<\/p>\n<\/div>\n<\/section>\n

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\"Colin<\/div>\n
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