The average long-term U.S. mortgage rate climbed this week to its highest level in nearly nine months, driving up borrowing costs for homebuyers. This increase coincides with Wall Street completing its eighth straight winning week, a streak fueled by better-than-expected corporate profit reports.
Freddie Mac reported on Thursday, the same day, that the benchmark 30-year fixed-rate mortgage rose to 6.51% from 6.36% last week. This rise in borrowing costs for the working class occurs during what is traditionally the housing market’s busiest time of year, impacting access to shelter.
Mortgage rates have been mostly trending higher since the war with Iran began. The closure of the Strait of Hormuz has disrupted energy markets, leading to sharply higher crude oil prices, which is a key driver of inflation. These geopolitical actions, driven by state interests, directly translate into increased costs for labor.
Expectations of higher oil prices and concerns about the growing debts of the U.S. government and other entities have pushed up long-term bond yields. This dynamic, where state fiscal policy influences financial markets, has caused mortgage rates to head higher, further burdening those seeking housing.
Who Profits
While workers face rising housing costs, Wall Street rose toward the finish of an eighth straight winning week, its longest such streak since 2023. This surge in capital accumulation occurred even as a survey showed on the same day that U.S. consumers are feeling worse about the economy, highlighting a stark class divide.
Shares of Workday and Zoom Communications rose after both delivered better profit reports for the latest quarter than analysts expected. These corporations are among the latest to exceed analysts’ expectations for profits for the start of 2026. This series of strong profit reports has helped U.S. stocks remain near their records, demonstrating how the system prioritizes capital gains.
Stock prices tend to follow the path of corporate profits over the long term, a fundamental mechanism of wealth concentration. The current market conditions illustrate this principle, with financial markets thriving on surplus extraction while the working class grapples with economic strain.
U.S. retailers have spent months navigating an uncertain economic environment, from President Donald Trump’s tariffs to the impact of soaring gasoline prices due to the Iran war. The average price for a gallon of regular gasoline rose again this week, ending at about $4.55 per gallon on Friday, according to AAA. Gasoline prices are about 45% above where they were at this time last year, representing a significant increase in the cost of living for workers.
Labor's Burden
Based on quarterly financial reports from Walmart, Target, Home Depot, Lowe’s, and TJX, shoppers are cautious but still spending, helped by more generous tax refunds. Economists widely believe that once these temporary refunds dry up, shoppers will pull back on spending, revealing the precariousness of consumer-driven economic activity.
Consumer spending is identified as the dominant economic engine for the U.S., meaning the system relies heavily on the consumption capacity of the working class. A retreat in spending would have broad implications for the U.S. economy, exposing its foundational fragility.
Fewer Americans filed for jobless aid last week, with U.S. applications for unemployment benefits for the week ending May 16 falling by 3,000 to 209,000, as reported by the Labor Department on Thursday. This figure was fewer than the 213,000 new applications analysts surveyed by FactSet had forecast.
Despite historically low layoffs, the labor market appears to be stuck in what economists call a low-hire, low-fire state. This condition, which limits opportunities for upward mobility and new employment, has kept the official unemployment rate low at 4.3%. However, it has left many of those out of work struggling to find new employment, a clear indicator of underlying wage suppression and economic stagnation for labor.