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Today: 30-year fixed mortgage rates pushed above 7.20% this week as the Iran conflict drags into its seventh month and oil hits $100/barrel, with the Fed now in a rate-hike cycle instead of cutting toward neutral.
Mortgage rates hit 7.20%, worst-case scenario now reality
The 30-year fixed rate closed the week at 7.20%, matching the worst-case forecast from July and exceeding the original 2026 range of 5.75%-6.75%. The culprit: seven months of conflict with Iran driving oil to $100, inflation above target, and the Fed pivoting from cuts to hikes. For Columbia agents, this means buyer affordability continues to compress - a $300K home now carries a ~$2,050/month P&I payment vs. $1,750 at 6%. Path to 8%: conflict worsens, spreads tick up, economic data stays solid. Path back to 6.50%-6.75%: ceasefire, oil drops, and labor market softens enough for the Fed to pause hikes. Until then, price-sensitive buyers in the Fort Jackson PCS and USC student housing markets will stay on the sidelines. Adjust listing pricing strategies accordingly and prepare investor clients for compressed cash flow on rental acquisitions.
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