Mortgage Interest Rates Today: Rates Jump to 6.37% as Iran War Keeps Oil Prices Elevated

Mortgage rates continued on their upward trajectory this week as escalating tensions in the Middle East roiled financial markets, pushing borrowing costs higher.

The average rate on 30-year fixed home loans rose to 6.37% for the week ending May 7, up 7 basis points from 6.30% the week before, according to Freddie Mac. For perspective, rates averaged 6.76% during the same period in 2025.

"The 30-year fixed rate mortgage averaged 6.37% this week," says Sam Khater, Freddie Mac's chief economist. "Recent data points to slightly better conditions for buyers with a boost in new-home sales, median new-home prices being down to their lowest level since July 2021, and higher inventory than in recent years. Together, these trends could modestly ease affordability pressures through the spring homebuying season."

U.S. military forces clashed with Iran in the blockaded Strait of Hormuz this week, driving up gas prices, reigniting inflation fears, and sending Treasury yields, which mortgage rates closely follow, higher as the prospects for peace remained uncertain.

"After a brief period of optimism that rates might finally be settling down, this fresh escalation served as a reminder that the path to lower rates runs squarely through the Persian Gulf right now," says Realtor.com® senior economic research analyst Hannah Jones. 

The ongoing conflict, which saw U.S. forces clash with Iranian speedboats, has kept oil prices elevated, stoking inflation concerns and giving the Federal Reserve little reason to cut rates anytime soon.

At last week’s Federal Open Market Committee (FOMC) meeting, the majority of policymakers, led by Chair Jerome Powell, voted to keep the federal funds rate at its current 3.5%-3.75% range. 

"The bottom line for borrowers is that the forces keeping rates up are global, and there is no clear near-term catalyst for a meaningful, sustained decline," says Jones. "Despite this less-than-sunny outlook, mortgage rates remain near their lowest levels in the last few springs, meaning buyers are still in a better position to afford a home this buying season compared to years past, especially as home prices continue to soften."

For buyers still struggling with affordability, a growing number of families are finding a creative path forward through buying together. A new Realtor.com report finds that nearly 4 million households have already embraced multigenerational living, and the trend is accelerating as families pool incomes and share costs to make homeownership work. 

According to Jones, while multigenerational homes carry a premium, the financial logic is compelling as a combined household income can stretch a budget significantly further than any single buyer could manage alone, while also offsetting costs like childcare and elder care that weigh heavily on family finances. 

The analyst points out that the housing market is more navigable than the headlines suggest for buyers willing to think outside the box about their options. Whether that means shopping lenders to secure a better rate, using time on the sidelines to build toward a stronger down payment, or exploring multigenerational living to make the numbers work, the path to homeownership remains open.

How mortgage rates are calculated

Mortgage rates are determined by a delicate calculus that factors in the state of the economy and an individual’s financial health. They are most closely linked to the 10-year Treasury bond yield, which reflects broader market trends like economic growth and inflation expectations. Lenders reference this benchmark before adding their own margin to cover operational costs, risks, and profit.

When the economy flashes warning signs of rising inflation, Treasury yields typically increase, prompting mortgage rates to increase. Conversely, signs of falling inflation or weakness in the labor market usually send Treasury yields lower, causing mortgage rates to fall.

The mortgage rates you’re offered by a lender, however, go beyond these benchmarks and take some of your personal factors into account.

Your lender will closely scrutinize your financial health—including your credit score, loan amount, property type, size of down payment, and loan term—to determine your risk. Those with stronger financial profiles are deemed as lower risk and typically receive lower rates, while borrowers perceived as higher risk get higher rates.

How your credit score affects your mortgage

Your credit score plays a role when you apply for a mortgage. A credit score will determine whether you qualify for a mortgage and the interest rate you'll receive. The higher the credit score, the lower the interest rate you'll qualify for.

The credit score you need will vary depending on the type of loan. A score of 620 is a "fair" rating. However, people applying for a Federal Housing Administration loan might be able to get approved with a credit score of 500, which is considered a low score.

Homebuyers with credit scores of 740 or higher are typically considered to be in very good standing and can usually qualify for better rates, which can reduce monthly payments.

Different types of mortgage loan programs have their own minimum credit score requirements. Some lenders have stricter criteria when evaluating whether to approve a loan. Ultimately, they want to make sure you're able to pay back the loan.