Interest rates on a 30-year fixed mortgage have topped 7% for the first time in more than a year.

The benchmark rate moved up to 7.07% on Thursday, according to the daily calculation from Mortgage News Daily, returning to the 7% mark that it had dropped below in May 2025.

"For shoppers who didn't find a home during peak season, the math has gotten more challenging," Kara Ng, an economist at Zillow, said in a research note.

Rates had steadily tumbled to about 6% in late February, but reversed when the U.S. and Israel started the war in Iran, disrupting oil shipments and driving up inflation. The benchmark rate is now 78 basis points higher than it was a year ago, per Mortgage News Daily.

The latest increase, a 10-basis point jump from Wednesday, comes amid new concerns that the conflict in Iran could extend past the end of President Trump's term in 2029. Those concerns helped push U.S. government bond yields to multiyear highs and the global price of oil above $106 a barrel.

Elevated rates have battered the housing market. Sales of existing homes declined 2% month-over-month in August to hit their lowest level in more than a year, according to a report on Thursday from the National Association of Realtors.

On top of geopolitical issues, solid jobs data from August have removed an excuse for the Federal Reserve to hold off on raising rates further as it battles with inflation, according to Ng. And while incomes have been rising faster than home values, they haven't outpaced inflation, she said.

"For the first half of 2026, home shoppers had better buying power than a year ago," Ng said. "That advantage ended in August."