It’s looking like mortgage rates are headed back up again after a nice reprieve in early April.
We all know they had a terrible March thanks to the beginnings of the ongoing conflict in the Middle East.
But then reversed course in the first half of April to wind up at a surprisingly-low 6.25% or so for a 30-year fixed.
Now it appears they are heading higher again, perhaps because the situation doesn’t appear destined for a resolution anytime soon.
Factor in oil at nearly $120 per barrel now and you can see why. Inflation, the enemy of mortgage rates.
Bond Yields and Mortgage Rates Climb on Oil Near $120 per Barrel
I’ve long said things were going to get worse before they got better.
I was actually surprised mortgage rates performed so well in the first half of April, despite so much uncertainty in Iran.
Sure, mortgage rates are still higher than they were in early March, but a rate around 6.25% for a 30-year fixed almost seemed too good to be true.
Especially since the sub-6% rate we saw prior to the conflict was the best rate we had seen in 3.5 years.
So it wasn’t like we were working from high levels and had a lot of room to come down.
Now it appears the market is beginning to come to terms with the fact that the Strait of Hormuz situation is very bad.
And that oil priced at nearly $120 per barrel is going to make a big impact on the economy, initially on gas prices and eventually on all other goods since energy factors into everything including manufacturing and logistics.
Bonds hate inflation so we’re starting to see bond yields tick up again, with the bellwether 10-year up to 4.40% today.
It was sub-4% in early February before the conflict and rose as high as 4.45% in late March before optimism for a quick end to the conflict pushed yields lower.
They’ve been quietly rising this past week and now look in danger of moving even higher than that 4.45% level.
The 30-year fixed tends to follow bond yields, so if that happens, we might see rates headed back toward 6.50% or higher.
Jobs Report Next Week Can Inflict Even More Damage on Mortgage Rates
Today’s is current Fed chair Jerome Powell’s final meeting and press conference as the boss.
He may stay on as a Fed governor after incoming chair Kevin Warsh takes over, but that remains to be seen.
In any case, the first big piece of data that the new-look Fed will have to go on will be the April jobs report, set to be released on May 8th.
If that comes in hot (or even warm), it could lead to even higher mortgage rates when combined with these inflation worries tied to energy.
That would make it even more difficult for Warsh to justify any rate cuts as the new Fed chair.
Conversely, if it’s another dud and shows little job creation, it’d be easier for Warsh to look beyond inflation that could prove temporary and propose cuts.
Mortgage rates aren’t set by the Fed, but do take cues from Fed rate expectations, driven by the underlying economic data.
So the April jobs report could be what determines if this move higher in mortgage rates gets even more legs, or fizzles again.
- Mortgage Rates Begin to Rise Again as Impasse in Middle East Becomes Clear - April 29, 2026
- What’s Going to Move Mortgage Rates Again? - April 28, 2026
- Where Would Mortgage Rates Be Without War in Iran? - April 24, 2026