30-Year Mortgage Rate Hits 6.87%, Highest Since June 2025, as Foreclosures and European Gas Prices Climb Too

Since U.S. forces struck two Iranian missile launchers on Larak Island Sunday and Iran hit back at two American air bases in Jordan, the war's economic bill has landed squarely on American homebuyers and European energy consumers.

The average rate on the 30-year fixed mortgage jumped 6 basis points Monday to 6.87%, according to Mortgage News Daily. That's the highest level since June 2025, up 12 basis points since Thursday and more than 30 basis points in the last two months, CNBC reported.

"While rates are technically at their highest level in more than a year, they haven't exactly exploded with surprising, new momentum," said Matthew Graham, chief operating officer at Mortgage News Daily. "Instead, it's been more of a slow grind fueled by the usual suspects: inflation expectations, elevated bond issuance, and economic resilience."

The day before the Iran war started at the end of February, the 30-year rate sat at 5.99%. On a $450,000 home with 20% down, that's the difference between a $2,156 monthly payment and $2,363 today, a $207 monthly hit, according to CNBC's calculations.

Foreclosures Rise, But From a Low Base

The higher-for-longer rate environment is showing up in foreclosure data. Nationwide, 39,906 properties filed for foreclosure in July, up 1% from June and 10% from a year earlier, according to an Aug. 27 report from ATTOM cited by the Epoch Times. That's one in every 3,603 housing units.

Nevada had the highest foreclosure rate, followed by South Carolina, Florida, Delaware, and Texas. Among mid-size metros, Punta Gorda, Florida, led with one filing per 899 housing units, followed by Killeen, Texas, and Las Vegas.

ATTOM CEO Rob Barber offered a more measured read than the headline number suggests. "The increase in foreclosure starts and completed foreclosures compared to last year shows that financial pressures remain a factor for some homeowners," he said. "However, the broader context is important. Foreclosure activity remains relatively low by historical standards."

Financial stress is building at the margins, not cracking the housing market broadly. A July survey by Truework, cited by the Epoch Times, found 85% of recent homebuyers with a mortgage said refinancing within three years is important to their financial health, up from 56% in a 2025 survey. Half said their mortgage would become unsustainable unless rates drop, and 40% said they'd need a second job if they can't refinance in three years. Truework called this "conditional affordability," meaning payments that work today only through continued sacrifice.

Meanwhile home prices aren't giving buyers a break either. Nationally, prices in June were up 1.5% year over year, an acceleration from May's 1.2% gain, according to the S&P Cotality Case-Shiller index. "As financing costs are kept high for prospective buyers, current homeowners remain reluctant to give up the low mortgage rates secured in prior years," said Rebecca Kaufman, associate director of commodities at S&P Dow Jones Indices.

The Oil and Rate-Hike One-Two Punch

Brent crude rose more than 3.5% Monday to roughly $91.25 a barrel and WTI gained a similar amount to about $86.36, according to Reuters figures carried by SANA. The XOP oil and gas exploration ETF moved higher on the same news, per MarketBeat.

Mortgage pain isn't just about oil. Federal Reserve Chair Kevin Warsh told the Jackson Hole symposium Friday that policymakers need confidence inflation is moving toward the Fed's 2% target "at a sufficient pace," or the central bank would have "work to do" — language markets read as opening the door to a rate hike rather than the cuts many had expected earlier this year. The two-year Treasury yield jumped to 4.35% from 4.22% on those remarks, according to SANA.

Europe is feeling a version of the same squeeze. Gas prices there jumped 5% to their highest level since 2023, according to OilPrice.com. German inflation accelerated in August as energy costs rose, though by less than expected, Reuters reported via GMA Network. ING's global head of macro, Carsten Brzeski, said "the stage looks increasingly set for another rate hike" at the European Central Bank's meeting next week, calling it an "insurance rate hike" to preempt second-round inflation effects from the energy shock.

Finance leaders from the G20 are meeting Monday and Tuesday in North Carolina as elevated energy and commodity prices tied to the Iran war weigh on global growth forecasts, according to Reuters.

The next data points that could move mortgage rates again land this week: Friday's U.S. jobs report, followed by inflation figures next week. A hot jobs number could push borrowing costs toward the psychologically significant 7% mark that mortgage rates have so far avoided, according to analysis from The Truth About Mortgage. A cooler reading could ease the pressure. Either way, the war's economic spillover now runs through the Fed's next move as much as through the price of oil itself.