The average 30-year fixed rate mortgage was 6.57% yesterday, unchanged since the day before. The 15-year fixed mortgage rate stood at 5.54%, down by 0.04%. The 30-year FHA mortgage averaged 5.87% yesterday, having risen by 0.01. Meanwhile, the 30-year jumbo mortgage rate was 6.7%, reflecting no change.
The bigger picture
Yet again, mortgage rates barely moved yesterday, according to I Can Buy data. That was because the minutes of the July meeting of the Federal Reserve's rate-setting body (the Federal Open Market Committee or FOMC) revealed little that wasn't already in the public domain.
Perhaps the key extract from the minutes was, " ... participants [FOMC members] generally expected inflation to increase in the near term. Participants judged that considerable uncertainty remained about the timing, magnitude, and persistence of the effects of this year's increase in tariffs. In terms of timing, many participants noted that it could take some time for the full effects of higher tariffs to be felt in consumer goods and services prices. Participants cited several contributors to this likely lag."
FOMC members also noted that "the unemployment rate remained low and that employment was at or near estimates of maximum employment." However, those observations were made before July's jobs report was released, which included downward revisions to previous months' hiring rates. At its next meeting, on September 17, the FOMC might take a different view of the employment situation.
The FOMC minutes may not — at least yet — have moved mortgage rates much, but they are probably behind a modest decline yesterday in the probability of a cut in general interest rates on September 17.
Yesterday, we reported, "The CME FedWatch tool puts the probability of such a cut, based on investors' wagers, at 86.1%." Overnight, that probability dipped to 81.0%.
Powell at Jackson Hole Tomorrow
Tomorrow, Fed Chair Jerome Powell is due to address the Economic Policy Symposium in Jackson Hole, Wyoming. We've been discussing this in some depth in recent days, including yesterday.
Powell comes across as steely but also a consummate diplomat. He's not the sort to raise his voice, and his pronouncements are always carefully measured.
However, some in the financial press wonder whether he might break free of those constraints tomorrow, as it's the last time he will appear in Jackson Hole. He's due to retire in May. If such speculation is correct, Powell could suggest that markets are too optimistic in their expectations of a September rate cut, while launching a spirited defence of the Fed's independence.
If he does, that could drive mortgage rates higher. But he's probably roughly as likely to acknowledge that a cut remains a real possibility next month, which might send those rates lower. We'll just have to wait to see what he says.
Mortgage Rate Trends: Past 90 Days
Purchase Rates
| Loan Type | Rate | APR | Daily Change | Monthly Change |
|---|---|---|---|---|
| 30-Year Fixed | 6.57% | 6.6% | +0% | -0.12% |
| 15-Year Fixed | 5.54% | 5.59% | -0.04% | -0.14% |
| 30-Year Fixed FHA | 5.87% | 7.08% | +0.01% | -0.09% |
| 30-Year Fixed VA | 5.97% | 6.11% | +0.02% | -0.1% |
| 30-Year Fixed USDA | 5.87% | 6.01% | +0.03% | -0.13% |
| 30-Year Fixed Jumbo | 6.7% | 6.72% | +-0% | -0.21% |
| 5/6 Year ARM | 6.51% | 6.55% | -0.03% | -0.25% |
Refinance Rates
| Loan Type | Rate | APR | Daily Change | Monthly Change |
|---|---|---|---|---|
| 30-Year Fixed | 6.62% | 6.65% | +0% | -0.12% |
| 15-Year Fixed | 5.54% | 5.59% | -0.04% | -0.13% |
| 30-Year Fixed FHA | 5.84% | 7.04% | +0.01% | -0.11% |
| 30-Year Fixed VA | 5.99% | 6.13% | +0.01% | -0.12% |
| 5/6 Year ARM | 6.59% | 6.62% | -0.06% | -0.28% |
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.
Here's the Comerica Bank's economics team's take on what to expect for the rest of this week:
"The Fed is back in focus this week. ... On Friday, Chair Powell could explain how he plans to shape the meeting’s decision-making in his speech in Jackson Hole. S&P Global’s PMIs [today] are anticipated to show a further contraction in manufacturing and a slowdown in services in the August flash estimates."
Mortgage rates today
Today's MarketWatch economic calendar contains six economic reports. We suspect none of them will affect mortgage rates much.
But, if any do, it's likely to be the purchasing managers' indices (PMIs) from S&P Global. PMIs measure activity in organizations' procurement departments, which can be a pretty good guide to future economic activity. But S&P ones tend to be less influential than those from the Institute for Supply Management. "Flashes" are early estimates, subject to change later.
Here are today's economic reports, alongside market expectations for each:
- Initial jobless claims for week ending Aug. 16 — Markets expecting 225,000, slightly up from the previous week's 224,000.
- August Philadelphia Fed manufacturing survey — Markets expecting 7.0, sharply lower than July's 15.9.
- August S&P flash services PMI — Markets expecting 55.0, down from the previous 55.7.
- August S&P flash manufacturing PMI — Markets expecting 49.5, down from the previous 49.8.
- July existing home sales — Markets expecting 3.91 million annualized, down from June's 3.93 million.
- July leading economic indicators — Markets expecting -0.1%, better than June's -0.3%.
We'll be surprised if any of these have much impact on mortgage rates. But anything's possible if the figures are shocking enough.
Usually, better-than-expected data push mortgage rates higher, while worse-than-expected numbers pull them lower.
No economic reports are scheduled for tomorrow, leaving the day clear for Jerome Powell's speech.
