The average 30-year fixed rate mortgage was 6.61% yesterday, unchanged since the day before. The 15-year fixed mortgage rate stood at 5.61%, the same as one the day before. The 30-year FHA mortgage averaged 5.94% yesterday, having stayed the same. Meanwhile, the 30-year jumbo mortgage rate was 6.92%, reflecting no change.
The bigger picture
Last Friday morning, we wrote, "If any economic report is likely to move mortgage rates, it's the monthly jobs report, officially called the employment situation report." And that morning's labor data really delivered.
Luckily for you and us, it delivered bad economic news, which typically sends mortgage rates lower. The size of the fall won't have set any daily records. But it was enough to take those rates to their lowest level in four months, according to Mortgage News Daily.
The drop might have been even sharper were it not for tariff announcements on Thursday. These sent bond yields (and so almost certainly mortgage rates) higher on Thursday evening, presumably because markets feared the possible implications for higher inflation from import taxes than the chances of their slowing the economy.
But the jobs report's surprisingly bad figures caused a real jolt. Not only were Friday's July figures disappointing, but revisions to previous months' data revealed a disturbing trend of tightening in the labor market.
Inflation is still a threat to low mortgage rates
It's effectively inevitable that higher inflation will push mortgage rates higher. Those rates are based on bond yields, which are a form of fixed income.
And the buying power of a fixed income is eroded by rising prices. So, investors who buy bonds insist on higher yields when they feel threatened by higher inflation.
Economists are still scrapping over whether higher tariff rates will fuel inflation. But most seem to think they will.
On Saturday, The New York Times explained why. "Just as the [tariff-skeptical economists'] models predicted, growth has indeed slowed, and inflation has risen," wrote Jason Furman, a former chair of the White House Council of Economic Advisers. "If you look at the first half of the year as a whole, there is more than a hint of stagflation, that dreaded combination of slow growth and inflation. In fact, ... reality has fallen short of the predictions that economists made late last year."
It could take many months for the full economic effects of tariffs to emerge. .Maybe they'll be much more benign than people like Furman fear. Nobody's yet sure whether an inflation spike will be transitory or persistent.
But, as long as uncertainty persists, we doubt mortgage rates will fall consistently within a long-term trend. Sure, events like Friday's fall will continue to happen, and there will be periods of ups and downs. But, we think, a fear of inflation will likely put the brakes on the extent of downward momentum.
Mortgage Rate Trends: Past 90 Days
Purchase Rates
| Loan Type | Rate | APR | Daily Change | Monthly Change |
|---|---|---|---|---|
| 30-Year Fixed | 6.61% | 6.64% | +0% | -0.02% |
| 15-Year Fixed | 5.61% | 5.66% | +0% | -0.02% |
| 30-Year Fixed FHA | 5.94% | 7.14% | +0% | +0.01% |
| 30-Year Fixed VA | 6.02% | 6.16% | +0% | +0% |
| 30-Year Fixed USDA | 5.99% | 6.13% | +0% | +0.03% |
| 30-Year Fixed Jumbo | 6.92% | 6.93% | +0% | -0.07% |
| 5/6 Year ARM | 6.71% | 6.75% | +0% | +0% |
Refinance Rates
| Loan Type | Rate | APR | Daily Change | Monthly Change |
|---|---|---|---|---|
| 30-Year Fixed | 6.69% | 6.72% | +0% | -0.03% |
| 15-Year Fixed | 5.61% | 5.66% | +0% | -0.03% |
| 30-Year Fixed FHA | 5.92% | 7.12% | +0% | +0.02% |
| 30-Year Fixed VA | 6.06% | 6.2% | +0% | +0.01% |
| 5/6 Year ARM | 6.77% | 6.8% | +0% | +-0% |
Coming up
Although economic reports are usually the main drivers of changes to mortgage rates, they're not the only ones. The general mood in markets and economically consequential news can also affect those rates. News items concerning tariffs and deficit funding are especially influential at the moment.
Mortgage rates today
It's a relatively quiet week for economic reports, certainly compared with last week's data-packed schedule. Yes, we're due two purchasing managers' indices (PMIs) for the services sector tomorrow and productivity figures on Thursday. And they're capable of moving mortgage rates at least modestly. But there's not a lot else to bother us.
And that includes the sole report on today's MarketWatch economic calendar. It will reveal factory orders in June.
Markets expect those to contract by -4.9% compared with an expansion of 8.2% in May. Any report can, in theory, affect mortgage rates. But this one very rarely does.
Market expectations are important. Higher-than-expected actual figures tend to push mortgage rates upward, while lower-than-expected ones often pull them downward. On-forecast numbers frequently leave those rates unchanged.
