The average 30-year fixed rate mortgage is 6.6% today, a decrease of 0.01% since yesterday. The 15-year fixed mortgage rate stands at 5.78%, down by 0.03%. The 30-year FHA mortgage now averages 5.97%, having risen by 0.02. Meanwhile, the 30-year jumbo mortgage rate is 6.69%, reflecting an increase of 0.04%.
The bigger picture
The U.S. launched a new wave of air strikes against Iran last night, just hours after President Donald Trump said he thought peace talks were over. Delays in restoring the global flow of oil are likely to soon hit gas prices and fuel hotter inflation. Mortgage rates respond badly to the prospect of a higher inflation rate, as we've seen over the last couple of days.
This was compounded by Russia's announcement yesterday that it was banning diesel exports for the rest of the month. Some experts doubt that it will be possible to repair Russian oil refineries, damaged by Ukrainian strikes, within that time frame.
Given that diesel fuels nearly all the trains and semis that move raw materials and goods, the implications of Russia's ban on global diesel prices could quickly have as big an impact on inflation (and mortgage rates) as the Iran conflict.
Scroll on down for details of today's economic reports and how they might affect mortgage rates.
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Mortgage Rate Trends: Past 90 Days
Purchase Rates
| Loan Type | Rate | APR | Daily Change | Monthly Change |
|---|---|---|---|---|
| 30-Year Fixed | 6.6% | 6.64% | -0.01% | +0.03% |
| 15-Year Fixed | 5.78% | 5.84% | -0.03% | +0.02% |
| 30-Year Fixed FHA | 5.97% | 7.18% | +0.02% | +0% |
| 30-Year Fixed VA | 6.08% | 6.24% | +0.01% | +-0% |
| 30-Year Fixed USDA | 5.99% | 6.15% | -0.04% | -0.02% |
| 30-Year Fixed Jumbo | 6.69% | 6.71% | +0.04% | -0.12% |
| 5/6 Year ARM | 6.22% | 6.3% | +0.01% | +0.04% |
Refinance Rates
| Loan Type | Rate | APR | Daily Change | Monthly Change |
|---|---|---|---|---|
| 30-Year Fixed | 6.65% | 6.69% | -0.02% | +0.02% |
| 15-Year Fixed | 5.75% | 5.81% | -0.03% | +0.01% |
| 30-Year Fixed FHA | 5.96% | 7.17% | +0.01% | +0% |
| 30-Year Fixed VA | 6.07% | 6.16% | -0.01% | -0.02% |
| 5/6 Year ARM | 6.44% | 6.52% | +0.24% | +0.03% |
What's 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 the war, employment, inflation, tariffs, and deficit funding are especially influential at the moment.
The Fed
May's price indices (the CPI, PPI, IPI and PCE) tend to lend weight to pessimistic arguments about future inflation rates. And those reports landed either side of the last meeting of the Federal Reserve's rate-setting committee.
The minutes of that meeting were released on July 7, and Barron's reported that day:
"The minutes from Kevin Warsh’s [the new Fed chair's] first Federal Reserve policy meeting contained few surprises, but underscored how divided policymakers remained over the path of interest rates. That could be a sign the Fed will stay on hold for longer."
"Nine policymakers penciled in at least one rate hike by the end of the year, according to the Summary of Economic Projections released in June, continued Barron's. "Eight officials expected no changes to the benchmark rate, while only one official believed the committee would implement a rate cut by the end of the year. Warsh declined to provide projections."
The Fed doesn't directly set new fixed-rate mortgage rates. But the factors that influence its decisions (and to a lesser extent the decisions themselves) certainly do move those rates.
Bond markets vs. stock markets
Mortgage rates are largely dictated by the yields on a type of bond, the mortgage-backed security (MBS). So, we focus on bond markets.
On May 7, The New York Times explored why stock markets and bond markets have been behaving so differently from each other since the start of the conflict in the Middle East.
Investors in stocks have been wagering that U.S. companies will continue to generate large profits during the conflict. And the stock market typically cares only about whether dividends and company values will continue to rise.
"But the bond market is another matter," said The Times. "Bond traders have maintained a much sharper focus on risk. Yields remain correlated with shifts in the price of oil. As oil prices have spiked and inflation has risen, yields have risen and bond prices, which move in the opposite direction, have fallen."
Comerica Bank's weekly preview
On Monday, Comerica Bank published its weekly preview:
"The minutes of the Federal Open Market Committee’s June meeting will draw more scrutiny than usual after Chair Warsh shortened the policy statement and eliminated forward guidance from it. The minutes will likely drop their usual description of policymakers’ opinions about their next step for rates, paralleling the leaner statement. In the absence of forward guidance, the discussion of the inflation outlook has the most potential to influence financial markets’ pricing of the Fed’s next steps."
Mortgage rates today
There are two economic reports on today's MarketWatch economic calendar. But they cover weekly jobless claims and existing home sales, neither of which typically affect mortgage rates much.
And even much more consequential reports would likely be overshadowed by news from the Middle East and Russia.
What's next?
No economic reports are scheduled for release tomorrow.
Events in the Middle East over the last couple of days might push mortgage rates appreciably higher if the new conflict is not swiftly resolved. That's because a prolonged closure of the Strait of Hormuz could again choke off 20% of the world's oil supply, putting renewed pressure on gas (and many other) prices.
