The average 30-year fixed rate mortgage is 6.8% today, a decrease of 0.02% since yesterday. The 15-year fixed mortgage rate stands at 5.79%, down by 0.02%. The 30-year FHA mortgage now averages 6.18%, having risen by 0.01. Meanwhile, the 30-year jumbo mortgage rate is 7.08%, reflecting no change.
The bigger picture
Have you been surprised that markets, bonds and mortgage rates haven't moved further than they have in recent months? After all, the business press has been full of screaming headlines about the dangers and uncertainties facing investors.
Well, MarketWatch reported an analysis by The Sevens Report yesterday that might explain what's going on. Under the headline,
Why markets are ignoring scary headlines about Iran, trade wars and U.S. debt, it suggested:
- Iran's military has been significantly degraded, and the risk of a major regional war seems contained for now.
- "Tariff fatigue has caused complacency to set in. There are too many headlines and deadlines for the average investor to follow accurately ... " As importantly, markets have convinced themselves that the U.S. will back off from the worst trade wars.
- "The massive tax and spending bill now being considered by the Senate will probably aggravate [the government debt] situation, and bond-market analysts might have expected a much bigger increase in long-term U.S. bond yields than has been seen." Still, investors are keeping their powder dry for now. However, there are possible triggers ahead that could see "markets ... care about deficits and debt, a lot!"
So, for now, Wall Street is happy to wait and see whether bad stuff happens rather than its usual practice of moving in anticipation of what looks likely to occur.
The Fed
The Federal Reserve’s rate-setting body, the Federal Open Market Committee (FOMC), begins a two-day meeting today. In theory, it could announce a change in general interest rates tomorrow, but almost nobody expects it to do so.
Indeed, the CME FedWatch tool puts the odds of those rates remaining unchanged at 99.8%. Just like markets, the Fed is currently happy to wait and see whether bad stuff happens before it acts.
What will happen at 2 p.m. Eastern tomorrow is the publication of a quarterly Summary of Economic Projections. And all markets are very sensitive to those.
The summary will include a "dot plot," which Britannica defines thus: "The Fed dot plot is a chart that shows you where each FOMC member thinks interest rates will be by the end of the current year, two or three (depending on the time of year) consecutive years after, and the more
ambiguous 'longer run.' Each 'dot' represents a member’s individual view."
In other words, the dot plot reveals where the people who set interest rates think interest rates will move in the future. That's what you call straight from the horse's mouth, and you can see why investors treat them seriously.
Fed Chair Jerome Powell is due to host a news conference at 2:30 p.m. Eastern tomorrow afternoon. Powell's voice is arguably the most powerful in the financial world, and markets hang on his every word.
Mortgage Rate Trends: Past 90 Days
Purchase Rates
| Loan Type | Rate | APR | Daily Change | Monthly Change |
|---|---|---|---|---|
| 30-Year Fixed | 6.8% | 6.83% | -0.02% | -0.06% |
| 15-Year Fixed | 5.79% | 5.84% | -0.02% | -0.07% |
| 30-Year Fixed FHA | 6.18% | 7.37% | +0.01% | -0.03% |
| 30-Year Fixed VA | 6.34% | 6.49% | +0.01% | +0.02% |
| 30-Year Fixed USDA | 6.23% | 6.37% | +0% | +0.09% |
| 30-Year Fixed Jumbo | 7.08% | 7.1% | +0% | -0.44% |
| 5/6 Year ARM | 6.78% | 6.82% | +0% | -0.28% |
Refinance Rates
| Loan Type | Rate | APR | Daily Change | Monthly Change |
|---|---|---|---|---|
| 30-Year Fixed | 6.87% | 6.89% | -0.02% | -0.05% |
| 15-Year Fixed | 5.8% | 5.84% | -0.01% | -0.06% |
| 30-Year Fixed FHA | 6.16% | 7.35% | +0.02% | -0.04% |
| 30-Year Fixed VA | 6.4% | 6.55% | +0% | +0.02% |
| 5/6 Year ARM | 6.9% | 6.93% | +-0% | -0.52% |
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 deficits are especially influential at the moment.
Here's what Comerica Bank's economics team is expecting this week:
"The FOMC is forecast to hold the federal funds target unchanged at their decision on Wednesday. They will likely repeat that the federal funds target’s current setting at a range of 4.25% to 4.50% puts monetary policy “in a good place” to react to downside risks to the job market or upside risks to inflation should they materialize. The Fed is also likely to repeat that they think it is appropriate to exercise “patience” and “wait and see” how the mix of higher tariffs and tax cuts collectively impacts the economy. A repeat of the patience/wait and see language would signal that policymakers expect to hold the federal funds target steady again at the July decision.
"May’s economic activity indicators due out this week are likely to come in weak. Retail sales are expected to fall on a drop in new car and truck sales and lower gas prices. Core retail sales excluding these categories likely rose, though. Industrial production was likely lower in May, too, with tariff uncertainty weighing on manufacturing and lower oil and gas production a headwind to mining. Housing indicators were likely mixed in May. Building permits likely rose after a large drop in April, while housing starts were likely lower on the month."
Mortgage rates today
Today's retail sales figures are more than capable of moving mortgage rates. The May data are expected to show those sales contracting by 0.6% following a tiny increase of 0.1% in April.
As usual, worse-than-expected numbers could help mortgage rates fall, while better-than-expected ones often push them higher.
There are other reports due this morning, notably industrial production and the import price index, but retail sales are likely to overshadow them.
Tomorrow
Read about tomorrow's FOMC activities above. Again, other reports that day, which include building permits and housing starts in May, are likely to be overshadowed by the dot plot and Powell's news conference.
