The average 30-year fixed rate mortgage is 6.63% today, an increase of 0.03% since yesterday. The 15-year fixed mortgage rate stands at 5.79%, up by 0.04%. The 30-year FHA mortgage now averages 5.95%, having dropped by 0.02. Meanwhile, the 30-year jumbo mortgage rate is 6.72%, reflecting a decrease of 0.02%.
The bigger picture
Mortgage rates edged a little lower on Friday. But they still start this morning higher than they were last Wednesday.
This week's economic reports are typically far from consequential for mortgage rates. So, without data to distract it, the market that determines those rates will likely focus on oil prices and war news.
That's not good. The re-escalation of the Iran war is pushing oil prices higher, and that's already affecting domestic inflation. As a nationwide average, gas prices hit $3.9980 for a gallon of Regular on Sunday, according to the AAA, up from $3.8760 just a week ago. It's looking close to inevitable that $4 gas will be back within days.
Scroll on down for details of today's economic report and how it 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 | 6.63% | 6.67% | +0.03% | +0.15% |
| 15-Year Fixed | 5.79% | 5.85% | +0.04% | +0.1% |
| 30-Year Fixed FHA | 5.95% | 7.16% | -0.02% | +0.09% |
| 30-Year Fixed VA | 6.06% | 6.22% | +-0% | +0.05% |
| 30-Year Fixed USDA | 6.03% | 6.19% | +-0% | +0.1% |
| 30-Year Fixed Jumbo | 6.72% | 6.74% | -0.02% | +0.08% |
| 5/6 Year ARM | 6.22% | 6.29% | +0.15% | +0.03% |
Refinance Rates
| Loan Type | Rate | APR | Daily Change | Monthly Change |
|---|---|---|---|---|
| 30-Year Fixed | 6.68% | 6.72% | +0.04% | +0.15% |
| 15-Year Fixed | 5.76% | 5.82% | +0.04% | +0.09% |
| 30-Year Fixed FHA | 5.95% | 7.16% | +0% | +0.09% |
| 30-Year Fixed VA | 6.06% | 6.15% | +-0% | +0.05% |
| 5/6 Year ARM | 6.2% | 6.28% | +0.1% | -0.11% |
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."
Mortgage rates today
There is just one economic report on today's MarketWatch economic calendar. And it's one that rarely affects mortgage rates.
It's June's leading economic indicators. "The Leading Economic Index (LEI) provides an early indication of significant turning points in the business cycle and where the economy is heading in the near term," says the Conference Board, which publishes the report. Despite it sounding important, it's been a long time since it moved mortgage rates appreciably.
Markets expect June's LEI to hold steady (0.0%), down from May's 0.1% increase.
Typically, mortgage rates rise when economic data are better than expected, while worse-than-expected figures tend to drive them lower. Numbers that land on forecast rarely affect mortgage rates much.
What's next?
This week is a very slow one for economic reports.
Events in the Middle East over the last week or so 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.
