US Mortgage Rates Climb to 11-Month High as Oil Shock Lifts Treasury Yields

US mortgage borrowing costs pushed higher this week as escalating geopolitical tension rippled through bond markets. The average 30-year conventional contract rate climbed to 6.69%, its highest level in 11 months, according to weekly figures from the Mortgage Bankers Association. Behind the move was a renewed surge in energy prices: oil futures rose a further 3% amid reports of broadening US military strikes in Iran and little apparent appetite for negotiations on either side. That fed through to Treasury markets, where the 10-year yield reached 4.64%, approaching the 4.67% year-to-date high recorded on 19 May before an earlier ceasefire was announced. Mortgage application activity was subdued overall, with the MBA index rising a modest 1.9% for the week. The composition of that increase was notable, however: new purchase applications climbed 5.5%, while refinancing applications slipped 2.4% as higher rates eroded the case for refinancing existing loans. Treasuries were otherwise little changed through a quiet summer overnight session, leaving the energy shock as the dominant driver of borrowing costs.