As Mortgage Rates Hit 10-Month Peak, Here’s What It Means for Home Buyers

If you were hoping to score a bargain mortgage rate, this is probably not your week.

The average rate on a 30-year fixed-rate mortgage climbed eight basis points to 6.47% in the week ending July 16, according to rates provided to NerdWallet by Zillow. (A basis point is one one-hundredth of a percentage point.) We calculate our weekly average using daily APRs recorded over the past five business days.

This marks the highest weekly mortgage rate reading since we were fresh off of Labor Day in 2025.

🤓 Kate on Rates: July 16, 2026

Will mortgage rates fall or rise over the next week?

While it’s impossible to predict exactly what mortgage rates will do, let’s look at the current landscape and what it could mean for mortgage shoppers.

The case for rates falling (less likely)

The Bureau of Labor Statistics dropped the June Consumer Price Index (CPI) report on July 14, which showed that inflation cooled beyond initial expectations last month. Following this release, average mortgage rates dropped eight basis points on Wednesday.

True, this report captures data from before the ceasefire with Iran collapsed. But this will be the most recent inflation data that the Federal Reserve will have to work with at its July 28-29 meeting. Central bankers’ preferred measure of inflation, the Personal Consumption Expenditures report, won’t be released until July 30.

Futures traders are currently predicting that central bankers will vote to leave the federal funds rate unchanged this month. If markets show growing confidence in “no change,” mortgage rates could fall a little.

The case for rates rising (more probable)

There aren’t any more major economic reports slated for release over the next week, so we can’t expect movement on that front. The main story to watch right now is the renewed fighting and naval blockade in Iran, which has sent oil prices up this week. Over the past five days, crude oil prices have jumped 10%.

When oil prices rise, it can ignite inflation fears among mortgage lenders. Then we see lenders hike up their rates to protect their revenue against the dollar’s weakening buying power.

The potential for rising inflation also tends to spark chatter about whether the Fed will raise overnight borrowing rates over the coming months to cool an overheating economy. When the federal funds rate goes up, it becomes more expensive for mortgage lenders to fund home loans, so those extra costs get passed along to borrowers.

Mortgage lenders adjust their rates before a Fed decision, not after, so just the perception that central bankers might raise the federal funds rate can be enough to push mortgage rates upward.

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Are you in one of the hottest housing markets?

In other real estate news, Realtor.com released its list of the hottest housing markets in June on July 13. This was measured by the number of unique views per listing, along with the number of days listings remained active.

According to the site, three of the top five hottest markets last month were in Connecticut: Hartford, Norwich-New London and Waterbury-Shelton. The other two: Erie, Pa. and Kenosha, Wis. Among homes in these markets, median days on the market were between 29 and 32.

Within the top 20 markets listed, the least expensive median listing price was in Binghamton, N.Y., at $227,000. This would mean a monthly mortgage payment around $1,877 at this week’s average 30-year rate of 6.47%, assuming the borrower makes a 10% down payment.

The highest median listing price was in Bridgeport-Stamford-Norwalk, Conn., at $849,000. Here, a monthly mortgage payment at this week’s average rate would be about $7,022, again assuming 10% down.

Most of the hottest markets as identified by Realtor.com are mid-sized metros outside of large and costly major cities, including Boston and New York.

Only one state outside of the East Coast managed to crack the top 20 markets: Wisconsin, which made the list with Kenosha, Racine and Oshkosh-Neenah.

If you’re moving from one of these top housing markets, getting a little extra for your home could help soften the blow of spiking mortgage rates as you shop for your next house.

For those who don’t have a red-hot house to sell before buying, shopping around with multiple lenders can help you find the lowest available rate. You can also button up your financial profile by paying down existing debts to strengthen your credit and lower your debt-to-income ratio.

Finally, if you bought a home within the past few years and are looking to refinance, don’t let the headlines about rising rates scare you off. Mortgage rates were regularly hovering around 7% in 2023, 2024 and even early 2025; for these homeowners, it could still be worthwhile to save by refinancing.

About the author

Taylor Getler is a home and mortgages writer for NerdWallet. Her work has been featured in outlets such as MarketWatch, Yahoo Finance, MSN and Nasdaq. Taylor is enthusiastic about financial literacy and helping consumers make smart, informed choices with their money.

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