Mortgage rates rose to their highest level in almost a year, as rising tensions in the Middle East spurred fears of higher inflation.

The 30-year fixed rate averaged 6.58% this week, up from 6.55% the week prior, according to Freddie Mac, the highest level to date this year. Mortgage rates are closely tied to the 10-year Treasury yield, which hit an 18-month high Thursday due to rising oil prices.

Yemen's Houthi militants claimed attacks on two Saudi tankers in the Red Sea, promising to further constrict oil supply. The move sent oil prices past $100 a barrel Thursday.

"Given what's happened in just recent days with the 10-year Treasury, I think mortgage rates will get closer to 7% in the coming weeks," said Mark Fleming, chief economist at First American.

Mortgage rates briefly fell below 6% in February, sparking hope for a rebound in home sales following years of stagnation. But the beginning of the Iran war drove rates upward and they have remained volatile since.

The surge in mortgage rates comes at the worst possible time. The real-estate industry had been hoping this year's spring selling season, typically the busiest period of the year, would shake the frozen market loose. Instead, it was largely a bust, with buyers spooked by higher rates and uncertain about the path of the economy and job market.

Earlier this month, the National Association of Realtors said sales of existing homes slid 2.4% in June over the previous month to a seasonally adjusted annual rate of 4.09 million, well below expectations.

The housing market has been stuck in what is now a four-year slump after the rise in mortgage rates in 2022 concluded a pandemic-era buying frenzy.

Many homeowners have opted to stay put in their current homes to maintain their low rates from years ago, which has weighed on available inventory. That has led to rising prices, making it harder for would-be first-time home buyers to crack into the market, especially with the pace of home-building still below levels economists say is necessary to address the country's housing shortage.

The national median existing-home price in June rose to $440,600, a 1.8% increase from a year earlier and the highest level on record, according to NAR.

Home prices aren't rising as fast as they were in years past, while income is continuing to grow, a positive sign for home sales regardless of where rates head, said Zillow Chief Economist Mischa Fisher.

Even without a significant decline in rates, economists expect the housing market to eventually pick up due to pent-up demand, with many homeowners having delayed moving for multiple years.

Buyers are less sensitive to rate volatility than they used to be, said First American's Fleming. "Many homeowners have rate lock-in fatigue and are just deciding to move anyway. And I don't know that whether it's a 6.5% or a 7% mortgage, it really makes that much of a difference to those who have that...fatigue and want to move," he said.

Home buyers have been waiting years for a significant decline in mortgage rates to happen. "I think at this point, everyone realizes that it's likely not and are essentially assuming a world in which rates are somewhere around the six to seven range," Fleming said.

Write to Nicholas G. Miller at nicholas.miller@wsj.com

(END) Dow Jones Newswires

July 23, 2026 12:00 ET (16:00 GMT)

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