Mortgage Rates Surge to 2026 High of 6.71% Amid Global Bond Selloff

Mortgage rates surged to their highest level in more than a year this week after the global bond market was roiled by a large-scale sell-off fueled by renewed inflation fears related to a fresh round of hostilities in the Middle East.The average rate on 30-year fixed home loans increased to 6.71% for the week ending Sept. 3, up 5 basis points from 6.66% the previous week and the highest since late July 2025, according to Freddie Mac. For perspective, rates averaged 6.50% one year ago."The 30-year fixed-rate mortgage averaged 6.71% this week," says Sam Khater, Freddie Mac's chief economist. "Purchase demand has remained relatively stable indicating steady interest from buyers adapting to evolving market conditions."Mortgage rates have been climbing since the outbreak of the U.S.-Iran conflict in late February. The ongoing conflict has put upward pressure on oil prices, driving up inflation and pushing it further from the Federal Reserve's 2% target. When the conflict appeared to be nearing resolution last month, bond yields declined—and mortgage rates followed suit.However, recent escalation in the fighting, culminating in a new round of U.S. airstrikes against Iranian targets this ...