US-Iran war resumes. What ongoing uncertainty means for mortgage rates

Renewed fighting between the United States and Iran has reignited uncertainty among investors, but it hasn't moved mortgage rates too much, data shows.

The 30-year fixed-rate mortgage continues to fluctuate around the mid-6% range. It averaged 6.49% as of July 9, up from the prior week when it averaged 6.43%, Freddie Mac said. A year ago at this time, the 30-year fixed-rate mortgage averaged 6.72%.

Even as tensions in the Middle East fray nerves, potential homebuyers shouldn't let that prevent them from shopping for a new home, experts said. Instead of focusing on weekly mortgage rate fluctuations, homebuyers should focus on things like credit score and nontraditional down payment sources that can make significant differences in affordability.

"The key is not to wait for the perfect rate," said Jeff DerGurahian, chief investment officer and head economist at non-bank retail mortgage lender loanDepot. "For homebuyers, the message remains simple: focus less on waiting for the perfect rate and more on finding a home that fits your budget and long-term plans."

Why are mortgage rates less affected by Middle East tensions?

The 30-year mortgage rate is directly tied to the 10-year Treasury note yield, economists said. When the 10-year Treasury yield shifts significantly one way or another, mortgage rates usually follow suit.

So, what moves the 10-year Treasury yield? Usually, any scenario that influences people's appetites for government securities.

For example, when inflation runs hot, people often dump treasuries because high inflation erodes their fixed returns. Since Treasury prices move in the opposite direction as yields, yields jump as Treasury prices fall as investors sell.

When fighting restarted between the United States and Iran, oil prices initially rose on fears the Strait of Hormuz could close again. "Interest rates picked up this week as the gradual breakdown of the ceasefire with Iran has stoked fears of further inflation and geopolitical instability," Joel Berner, a senior economist at Realtor.com, said in a blog post.

If oil had continued to jump, inflation fears could have taken hold and kept yields boosted. However, oil prices have since eased, providing some relief.

What else can be holding buyers back?

High home prices are affecting buyers. The median existing home sales price reached a new high of $440,600 in June, the National Association of Realtors said on July 9. It was the 36th consecutive month of year-over-year price increases.

Americans can work on improving credit scores to get the best rate and terms, but if inventory stays low, prices will remain elevated, analysts said.

"Without consistent gains in inventory, home prices can accelerate," said Lawrence Yun, National Association of Realtors' chief economist. "It is critical to introduce more supply to the market to widen the opportunity for homeownership."

Young Americans forge new paths to homeownership

Young Americans are often cited as being locked out of homeownership because they can't afford to buy one, but Gen Z accounted for 1 in 5 – the largest share on record – purchase rate locks in the three months through June, according to the July Mortgage Monitor from data provider Intercontinental Exchange. A purchase rate lock is when a lender guarantees a specific interest rate and points for a set period while the loan application is processed.

The oldest members of Gen Z are approaching 29 years old.

"Despite facing one of the tougher affordability environments in decades, younger buyers are finding ways to become homeowners," said Andy Walden, Intercontinental Exchange's head of mortgage and housing market research.

Many of them are also boosting down payments by tapping funding beyond savings, Intercontinental Exchange said.

"While 71% of 2026 homebuyers relied on personal savings for their down payment, alternative, non-savings sources now account for 29% of all purchase down payments ‒ the highest share in seven years," Intercontinental Exchange said. Of those using alternative income sources, about 1 in 5 Gen Z buyers relied on either a family gift or a loan to make a down payment.

How can Americans afford homes?

One of the first things buyers should know is what their credit score is; then they should devise a plan to improve it, financial experts said.

Lenders use credit scores as one measure to decide whether to approve a loan and on what terms, including the interest rate. A high credit score tells lenders you're at a lower risk of defaulting on a mortgage. One way people can improve their credit score is to pay rent on time. Half of renters don't know that paying rent on time can help build a person's credit score, a FICO survey showed.

Most conventional mortgages require homebuyers to have a minimum credit score of 620 for approval, but certain first-time homebuyers may qualify for special government-sponsored loans with more lenient approval requirements, according to Equifax.

Gen Z makes up nearly a third of all first-time homebuyer loans and 27% of Federal Housing Administration purchase lending, "reflecting both its growing presence in the market and reliance on government-backed financing to navigate affordability challenges," Intercontinental Exchange said in its report.

Potential homebuyers should also do what they do for all large purchases: shop around for the best lending terms and rates. Many homebuyers don't realize multiple mortgage-related credit inquiries within a short window (typically 45 days) are treated as a single inquiry when calculating your credit score, experts said.

Lenders compete for business, too, and may cut you a deal, experts said.

Medora Lee is a money, markets and personal finance reporter at USA TODAY. You can reach her at mjlee@usatoday.com and subscribe to our free Daily Money newsletter for personal finance tips and business news every Monday through Friday morning.

This article originally appeared on USA TODAY: US-Iran war resumes. What ongoing uncertainty means for mortgage rates

Reporting by Medora Lee, USA TODAY / USA TODAY

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This story was originally published July 10, 2026 at 9:40 AM.