The average contract rate for a 30-year fixed mortgage in the US rose to 6.85% in the week ended September 4, its highest level since June 2025, according to the Mortgage Bankers Association. The increase followed a rise in Treasury yields as renewed Middle East tensions fueled inflation concerns, while stronger US labor-market data reinforced expectations for a September rate hike. Mortgage rates have risen nearly 80 basis points since the US and Israel began strikes against Iran in late February. Meanwhile, total mortgage applications fell 2.7%, reversing a 0.8% increase the previous week. Refinancing applications dropped 6.2%, while purchase applications edged down 0.2%.