The average 30-year fixed rate mortgage was 6.63% yesterday, unchanged since the day before. The 15-year fixed mortgage rate stood at 5.8%, down by 0.02%. The 30-year FHA mortgage averaged 5.97% yesterday, having risen by 0.02. Meanwhile, the 30-year jumbo mortgage rate was 6.77%, reflecting an increase of 0.09%.
The bigger picture
Mortgage rates barely moved yesterday. Monday's consumer price index (CPI) likely stopped those rates from climbing sharply because it showed prices in June falling more quickly than markets had been expecting.
Today's producer price index (PPI) is typically significantly less consequential than the CPI. So, we can't assume that it will be as big a brake on higher mortgage rates today.
Oil prices have been rising steadily over the days since the war with Iran re-escalated. That means that inflation will probably warm up again in the coming months.
Scroll on down for details of today's economic reports and how they might affect mortgage rates.
👉Stay ahead of the market. Subscribe to the Mortgage Research Network Podcast
Mortgage Rate Trends: Past 90 Days
Purchase Rates
| Loan Type | Rate | APR | Daily Change | Monthly Change |
|---|---|---|---|---|
| 30-Year Fixed | 6.63% | 6.67% | +-0% | +0.08% |
| 15-Year Fixed | 5.8% | 5.86% | -0.02% | +0.08% |
| 30-Year Fixed FHA | 5.97% | 7.18% | +0.02% | +0.04% |
| 30-Year Fixed VA | 6.07% | 6.23% | +-0% | +-0% |
| 30-Year Fixed USDA | 6.03% | 6.19% | +0.05% | +0.03% |
| 30-Year Fixed Jumbo | 6.77% | 6.79% | +0.09% | +0.09% |
| 5/6 Year ARM | 6.37% | 6.45% | +0.26% | +0.27% |
Refinance Rates
| Loan Type | Rate | APR | Daily Change | Monthly Change |
|---|---|---|---|---|
| 30-Year Fixed | 6.66% | 6.7% | -0.02% | +0.08% |
| 15-Year Fixed | 5.78% | 5.84% | +0% | +0.08% |
| 30-Year Fixed FHA | 5.97% | 7.17% | +0.04% | +0.04% |
| 30-Year Fixed VA | 6.07% | 6.16% | +0% | -0.01% |
| 5/6 Year ARM | 6.25% | 6.33% | +0.08% | +0.08% |
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 on Jun. 16-17.
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 minutes themselves revealed: "Most participants remarked on scenarios in which inflationary pressures would dissipate and inflation would soon begin to return to 2 percent. In such scenarios, almost all of these participants noted that it would likely be appropriate to maintain or eventually lower the target range for the federal funds rate. Most participants, however, also pointed to scenarios in which, in the context of stable labor market conditions, inflation would remain elevated due to strong AI-related demand, the conflict in the Middle East, or the effects of tariffs. In such scenarios, almost all of these participants indicated that some policy
firming would likely be warranted to return inflation to 2 percent."
In this context, "policy firming" very likely means one or more hikes to general interest rates this year.
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:
"CPI inflation likely eased back below 4% [year-over-year] in June as energy flows
resumed through the Strait of Hormuz, helping U.S. gas and diesel prices
reverse part of their spring surge. PPI inflation, which is more
sensitive to energy prices than the CPI, likely slowed as well, moving
back below 6%. However, core CPI and PPI likely improved less and
probably continue to run above levels consistent with the Fed’s 2%
inflation target, which is measured by the PCE price index (PCE averages
about a quarter percentage point below CPI over the long run). Last
week’s re-escalation of the Iran conflict pushed U.S. energy prices
modestly higher, potentially obstructing further progress toward lower
inflation in July."
Mortgage rates today
There are two economic reports on today's MarketWatch economic calendar. However, June's PPI is likely to overshadow the July Empire State manufacturing survey.
Like other price indices, the PPI has four main components. However, MarketWatch now provides only two of the analysts' consensus forecasts on which market expectations are based.
Both relate to June. One of the numbers is for "core" inflation, which excludes energy and food prices.
Here are market expectations for those three readings:
- June PPI — Markets expect all prices to have been unchanged (0.0%) after rising by 1.1% in May
- June core CPI — Markets expect core prices to have risen by 0.3%, only slightly lower than May's 0.4%
Figures above those expectations are likely to see mortgage rates rise, while smaller numbers would typically push those rates lower. So, we'd like a repeat of yesterday, when the CPI came in better than expected.
This afternoon, the publication of the Federal Reserve Beige Book is scheduled. This isn't an empirical report but rather a collection of anecdotes picked up by Fed employees and officers across the country. However, markets sometimes take notice of it.
What's next?
We're due June retail sales data tomorrow and a preliminary reading of July's consumer sentiment index on Friday.
Events in the Middle East over the last few days might push mortgage rates appreciably higher if the renewed 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 additional pressure on gas, diesel and many other prices.
