Mortgage rates have increased for the second week in a row on July 16, according to Freddie Mac. The national average 30-year fixed mortgage rate is up .06% to 6.55%.Rates have been hovering around 6.5%, and they’ve now surpassed 6.5% for the first time in more than a month.In my years of reporting on mortgage rates, I’ve learned to evaluate several numbers to put current rates in perspective. Week-over-week and year-over-year changes are important, of course. But one number that doesn’t get the attention it deserves is the 52-week average.How mortgage rates stack up against 52-week averagesComparing current rates with the 52-week average rate helps us understand whether today’s rates are relatively high, low, or normal compared with the last full year.The 30-year 6.55% fixed rate is 0.23% higher over the 52-week average of 6.32%. The 15-year 5.93% rate is 0.32% above its average.This is my way of saying that mortgage rates are relatively high.I want to point this out because many experts — including me — have stated that 2026 mortgage rates are below the historical average. They’ve also been down year over year. (Although the annual 15-year rate is 0.01% higher the week of July 16.)Related: Zillow sees change in housing market, home valuesBut when comparing July 16 mortgage rates to rates from the last full year, there’s no denying that current rates are fairly high. What’s causing these high rates, and where will they go from here?We can easily draw a line from the Iran war to oil prices to inflation to mortgage rates.”Mortgage rates are essentially tied to the outcome of the Iran conflict at this point,” Corey Burr, senior vice president at TTR Sotheby’s International Realty, told TheStreet.Mortgage rates rely on the Iran war and oil prices”The biggest story right now is the end of the ceasefire with Iran and what it could mean for oil prices,” Jeff DerGurahian, chief investment officer and head economist at LoanDepot, said in a statement shared with TheStreet.Mortgage rates had ticked down for a few weeks as the United States and Iran seemed to be working toward ending the war. However, Iran attacked vessels on the Strait of Hormuz, the two countries continued to attack each other, and President Donald Trump announced that the ceasefire was over on July 8.Since July 8, fixed mortgage rates have been rising.”If [the war] festers later into the year or into 2027, I anticipate the 30-year, fixed mortgage rate will be range-bound in the 6-7% range,” Burr said. “If there is a quick resolution to the conflict and oil drops precipitously, then the 30-year fixed should fall below 6%.”More Mortgage Rates:Real estate giant updates mortgage rate, home price predictionsSocial Security inaction could push mortgage rates higherHarsh 6.5% mortgage rates cause stunning housing market changeDerGurahian pointed out that the uncertainty about the war is preventing mortgage rates from decreasing. I also expect that mortgage rates will stay stagnant or even increase the longer the war continues.Oil prices have also been rising in response to the end of the U.S.-Iran ceasefire. Brent crude, the global benchmark for oil prices, opened at $72.11 on July 7, Business Insider confirmed, and closed at $85.06 on July 15.How do oil prices indirectly impact mortgage rates? Oil affects the cost of so many goods and services in America that when oil prices are up, inflation typically also rises.And when inflation grows more aggressively, you can probably expect mortgage rates to follow suit.Like I said, a straight line from the war to oil prices to inflation to mortgage rates.Slower inflation may not be enough to help mortgage ratesNow let’s talk about the current relationship between inflation and mortgage rates.The Bureau of Labor Statistics published the June Consumer Price Index (CPI), a key measure of inflation, on July 14. And the numbers were actually better than what most people expected.Wall Street had expected annual inflation growth rate of 3.8%, but it came in at 3.5%. The year-over-year core inflation rate (which omits food and energy) was 2.6%, while economists had predicted a 2.9% increase.Since inflation is better than expected, shouldn’t mortgage rates at least inch down a little in the near future?Possibly… but not necessarily.The CPI looked at June data, and the ceasefire didn’t end until July 8. The July CPI report, released Aug. 12, could tell a very different story.Also, the CPI isn’t the most important index for projecting future moves by the Federal Reserve.The Federal Reserve heavily bases its decision on whether to cut, hike, or hold the federal funds rate on what inflation is doing. The central bank doesn’t discount the CPI, but it considers the Personal Consumption Expenditures (PCE) price index more seriously because it provides a “broader and more comprehensive measure of inflation,” according to the Federal Reserve Bank of Cleveland.The Bureau of Economic Analysis (BEA) releases the next PCE report on Thursday, July 30 — the day after the next Fed meeting ends. So, it won’t have an impact on the July Fed meeting.The July 30 PCE report will also show June data. We won’t even see the PCE data for July until Aug. 28, and the next Fed meeting will be Sept. 15-16.
The latest inflation data probably won’t lead to a mortgage-rate decrease.Justin Sullivan / Getty Images
Key takeaways from mortgage rate newsTake a “wait and see” approach for Fed rates. Some analysts have predicted two or even three fed funds rate hikes in 2026. This is definitely possible, but DerGurahian thinks the market might be jumping to conclusions. “If labor market data continues to cool and inflation readings come in at or below expectations… what is currently being viewed as multiple hikes could ultimately look more like a one-and-done move by the Fed,” he said.But don’t plan for mortgage rates to plummet. Regarding the Fed’s decisions and their impacts on mortgage loan rates, it’s like the saying goes: Hope for the best but plan for the worst. There are still a lot of unknowns regarding what the Fed will do in 2026.Don’t wait for rates to drop before buying. There’s no guarantee that interest rates will decrease in the near future. Therefore, you shouldn’t hold off on buying a house just because you’re waiting for a lower rate. That might not happen for a long time. If you can still comfortably afford a house at today’s mortgage rates, go ahead and start the process.Look for opportunities to lock in a lower mortgage rate. Burr recommended obtaining a preapproval letter from a mortgage lender, getting quotes from several lenders, and comparing fixed- versus adjustable-rate loans.Related: Dave Ramsey, Vanguard warn Americans on housing costs