The average 30-year fixed rate mortgage was 6.8% yesterday, a decrease of 0.02% since the day before. The 15-year fixed mortgage rate stood at 5.79%, down by 0.02%. The 30-year FHA mortgage averaged 6.18% yesterday, having risen by 0.01. Meanwhile, the 30-year jumbo mortgage rate was 7.08%, reflecting no change.
The bigger picture
A recap of what we said yesterday
As we reported yesterday, the Federal Reserve’s rate-setting body, the Federal Open Market Committee (FOMC), ends a two-day meeting today. In theory, it could announce a change in general interest rates at 2 p.m. Eastern this afternoon, but almost nobody expects it to do so.
Indeed, the CME FedWatch tool puts the odds of those rates remaining unchanged at 99.9%, up from 99.8% yesterday.
What will happen at 2 p.m. Eastern today 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 describes as follows: "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 this afternoon. Powell's voice is arguably the most powerful in the financial world, and markets hang on his every word.
Some new context
Yesterday afternoon, MarketWatch provided its take on the way in which the Fed is most likely to move markets (and mortgage rates) this afternoon:
"The central bank’s median projection for this year, known colloquially as the 2025 “dot,” is the focus of many market participants ahead of the Fed’s coming policy announcement on Wednesday. Since March, the 2025 dot has pointed to two interest-rate reductions by the end of the year, and fed-funds futures traders currently see only a 37.7% chance of the Fed delivering something less than this — setting the broader financial market up for what may turn out to be a disappointment."
That report went on to quote Matthew Ryan, head of market strategy at financial services firm Ebury: "A hawkish dot plot and remarks [from Powell] that stress a lack of urgency to lower rates could allow room for some dollar strength in the second half of the week."
In other words, markets will be hoping that this afternoon's dot plot still shows two rate cuts later this year. More than two could help mortgage rates move lower. But one or zero could push them higher.
Similarly, the more optimistic the Fed Chair sounds in his news conference that there might be two or more rate cuts later this year, the better for mortgage rates.
Other potential influences today
Markets are very unpredictable in their reactions to military conflicts. However, a New York Times report yesterday evening could force Wall Street to sit up and take notice.
"Evidence continued to grow that the United States was considering joining Israel’s bombing campaign," said the Times. It also reported, "A spokesman for the foreign ministry of Qatar, Majed bin Mohammed Al Ansari, said on Tuesday that Israel’s attack on Iran was 'an
uncalculated escalation with serious consequences for regional security, which is already strained and cannot handle further crises.'"
It's one thing for markets to shrug off a seemingly contained conflict between two regional powers. It is quite another to ignore a war that involves the United States and perhaps other key states in the region.
The biggest threat to mortgage rates is if the supply of oil to global markets is hit. Yes, the U.S. has been a net exporter of oil since 2019, according to the Energy Information Administration.
But the price Americans pay for gas, natural gas and oil is still set by global markets. "U.S. oil prices rose more than 4 percent on Tuesday, to around $75 a barrel, on fears that the United States could become more involved in the conflict between Israel and Iran," says The New York Times in a separate story.
So, a supply shortage resulting from a war in the critically important Middle East could cause a spike in inflation. And higher inflation almost always leads to higher mortgage rates.
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 later 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. ... 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 FOMC activity isn't the only thing on today's calendar. But it is the one most likely to affect mortgage rates. Having said that, Fed Days sometimes leave those rates largely unmoved. It all depends on whether they meet, exceed or disappoint market expectations.
Today's other reports rarely change mortgage rates. They're May figures for building permits and housing starts, and last week's new claims for unemployment benefits. They're all expected to barely budge from their previous reporting periods.
Tomorrow and Friday
Bond markets are closed for the Juneteenth public holiday tomorrow, meaning mortgage rates shouldn't move. So, we won't be publishing this column that day.
Friday brings June's Philadelphia Fed manufacturing survey and May's leading economic indicators. It's rare for either of those to move mortgage rates perceptibly.
