Washington, D.C. — A new analysis from the Center for American Progress finds that the Trump administration’s war with Iran is driving up mortgage rates. As a result, housing costs are rising for American families, adding $63 per month, $756 per year, and $22,680 over the life of a typical 30-year mortgage for first-time homebuyers.
Since the end of February, average 30-year fixed mortgage rates have climbed from 5.98 percent to 6.22 percent, according to Freddie Mac data, reversing what had been a brief dip below 6 percent and signaling renewed pressure on housing affordability.
“The president’s war is costing lives and taxpayer dollars abroad and raising costs for families here at home,” said Kyle Ross, senior policy analyst at CAP and author of the analysis. “Even small increases in mortgage rates can add up to tens of thousands of dollars over time, putting homeownership further out of reach for working families.”
CAP’s analysis highlights:
- Higher mortgage costs for homebuyers. A typical first-time buyer would pay $63 more per month, $756 more per year, and $22,680 more over the life of a 30-year loan due to the recent increase in mortgage rates.
- Rates are rising due to inflation expectations. Mortgage rates track the 10-year Treasury yield, which has increased as markets anticipate higher inflation driven by rising oil prices linked to the conflict.
- Costs are already hitting families nationwide. With thousands of homes sold each day, buyers are already locking in higher monthly payments, reducing their ability to cover other essential expenses.
- Prolonged conflict will worsen affordability. Continued instability in energy markets is likely to keep inflation and mortgage rates elevated, further straining household budgets.
Read the analysis: “Trump’s War in Iran Is Increasing Mortgage Rates” by Kyle Ross.
For more information or to speak with an expert, please contact Christian Unkenholz at [email protected].