The average 30-year fixed rate mortgage is 6.81% today, a decrease of 0.05% since yesterday. The 15-year fixed mortgage rate stands at 5.77%, down by 0.04%. The 30-year FHA mortgage now averages 6.13%, having dropped by 0.06. Meanwhile, the 30-year jumbo mortgage rate is 7.21%, reflecting a decrease of 0.03%.
The bigger picture
Mortgage rates barely budged yesterday as markets ignored that morning's economic reports. No surprise there. It's been the same story since tariffs and deficits began dominating headlines and lead stories in the financial media.
We must have repeated that message 50 times recently, though mostly phrased differently. And you may be sick of reading it.
But the fact is, tariffs and deficits seem to dominate investors' minds. And one class of investor — those who trade in mortgage-backed securities, a type of bond — largely determines mortgage rates.
What's worrying Wall Street
Wall Street sees tariff barriers that are too high as a shortcut to a recession. We wouldn't normally mind that (beyond the misery that higher unemployment, worse job security and shorter hours bring to fellow citizens) because economic downturns typically bring lower mortgage rates. But this time, we're expecting a spike in inflation to accompany the downturn. And such spikes often send those rates higher.
Meanwhile, investors are also spooked by the "One Big, Beautiful Bill," which is currently working its way through Congress. It will determine the next round of federal taxation and spending.
And it "would add billions of dollars in new tax breaks for tipped workers, business owners and other groups," said The New York Times on Monday. "It would cut spending, too, but not by nearly as much. In total, the bill would add trillions to the national debt over the next decade, according to congressional scorekeepers."
It's the new debt that bothers Wall Street. This year, foreigners have lost some of their confidence in certain U.S. assets, notably Treasury bonds (which finance government debt) and the dollar. The prospect of trillions more in debt is unlikely to reassure them.
That is likely to keep upward pressure on Treasury yields. And mortgage rates typically shadow those yields.
An alternative view
The government is confident that Wall Street is talking nonsense. It believes tariffs might inflict some short-term pain, but will ultimately reinvigorate the economy and especially the manufacturing sector.
It also believes that tax cuts will quickly boost the economy, raising output so much that they will pay for themselves through additional revenues.
Economists and investors are deeply skeptical of these government narratives. But it wouldn't be the first time those people have got things badly wrong. Your view of who's right may largely depend on your political bent and your news sources.
Mortgage Rate Trends: Past 90 Days
Purchase Rates
| Loan Type | Rate | APR | Daily Change | Monthly Change |
|---|---|---|---|---|
| 30-Year Fixed | 6.81% | 6.84% | -0.05% | -0.02% |
| 15-Year Fixed | 5.77% | 5.82% | -0.04% | +-0% |
| 30-Year Fixed FHA | 6.13% | 7.33% | -0.06% | -0.05% |
| 30-Year Fixed VA | 6.28% | 6.43% | -0.05% | +-0% |
| 30-Year Fixed USDA | 6.13% | 6.27% | -0.02% | -0.17% |
| 30-Year Fixed Jumbo | 7.21% | 7.23% | -0.03% | -0.03% |
| 5/6 Year ARM | 6.71% | 6.75% | -0.1% | -0.07% |
Refinance Rates
| Loan Type | Rate | APR | Daily Change | Monthly Change |
|---|---|---|---|---|
| 30-Year Fixed | 6.89% | 6.92% | -0.02% | -0.04% |
| 15-Year Fixed | 5.77% | 5.81% | -0.05% | +0% |
| 30-Year Fixed FHA | 6.11% | 7.31% | -0.07% | -0.07% |
| 30-Year Fixed VA | 6.32% | 6.46% | -0.07% | -0.04% |
| 5/6 Year ARM | 6.85% | 6.88% | -0.01% | -0.07% |
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.
Here's Comerica Bank's opinion on what this week's remaining economic reports might bring:
"Employers likely added jobs at a modest pace in May as businesses waited to see how tariff policies ultimately settle out. The unemployment rate likely held unchanged, with modest growth of employment and of the labor force. Wage growth likely slowed in year-over-year terms. The labor force participation rate likely edged lower on the month. Job openings were likely lower in the latest release, released at a one-month lag to payroll employment growth and the unemployment rate.
"PMI surveys likely improved in May as financial market conditions stabilized and lower tariffs cheered consumers and businesses. Businesses likely reported slightly less input price inflation, helped by lower prices of steel and crude oil. The trade deficit likely shrank in April as the rush to beat tariffs ended. Both imports and exports likely fell in the month as higher tariffs kicked in."
Mortgage rates today
We're due three economic reports this morning, according to the MarketWatch economic calendar:
- May purchasing managers' index (PMI) for the services sector from the Institute of Supply Management (ISM) — Markets expect this to improve a little, coming in at 52.1% compared with April's 51.6%
- May PMI for the services sector from S&P Global — Markets expect this to be unchanged since April at 52.3
- May ADP employment report for the private sector — Jobs created that month are expected to rise appreciably compared with April: to 110,000 from 62,000
Lower-than-expected numbers tend to exert downward pressure on mortgage rates, while higher-than-expected ones usually push those rates upward. On-forecast data often leaves rates unchanged.
This afternoon, we're also expecting the Federal Reserve's beige book for May. The Fed explains, "Each Federal Reserve Bank gathers anecdotal information on current economic conditions in its District through reports from Bank and Branch directors and interviews with key business contacts, economists, market experts, and other sources. The Beige Book summarizes this information by District and sector."
This week
Friday brings arguably this month's blockbuster data in the shape of the May jobs report. If it contains surprises, mortgage rates may move appreciably.
