The average 30-year fixed rate mortgage was 6.78% yesterday, unchanged since the day before. The 15-year fixed mortgage rate stood at 5.78%, the same as one the day before. The 30-year FHA mortgage averaged 6.15% yesterday, having stayed the same. Meanwhile, the 30-year jumbo mortgage rate was 7.01%, reflecting no change.
The bigger picture
Few expected Saturday's U.S. airstrike on Iran, only 48 hours after a two-week timeline was put in place. And markets will spend today working through the implications of the attack.
The consensus investors reach will determine what happens to mortgage rates today. It could go either way.
Yesterday afternoon, The Wall Street Journal reported, "Vice President JD Vance signaled that Iran's stockpile of enriched uranium is still intact but also that the U.S. isn’t interested in destroying the regime." It also said experts think it could be weeks before a full damage assessment could be completed. These are worrying because they imply that America's role in the conflict may not be over.
"The fight between two well-armed Mideast powers has their neighbors worried about the conflict spreading, a concern only deepened by U.S. involvement," reported The New York Times.
Quoting Andrew Brenner, head of international fixed income at NatAlliance Securities, Barron's reckons there's a good chance mortgage rates will fall today. At least, Brenner predicted falling bond yields, and mortgage rates typically shadow some of those yields.
Yet more uncertainty
However, MarketWatch highlighted the uncertainties ahead, quoting a different analyst: "'For markets, this shatters the illusion of containment. What was a regional proxy conflict is now a high-stakes, U.S.-driven air war targeting WMD infrastructure — with unpredictable spillovers across energy markets, global shipping lanes, and risk sentiment,' said Stephen Innes, managing partner at SPI Asset Management, in a note."
Whatever happens to mortgage rates today, things could change as this now-U.S. war develops. The ideal would be for Iran to fold and effectively surrender unconditionally. Judging from U.S. government messaging, that seems to be the expectation (or, maybe, hope) in D.C.
However, some think that's an ahistorical expectation. Will Iran, a long-running regional superpower of 91 million people, simply cave? Or might it use its own forces or its proxies to attack U.S. bases and interests in the region and perhaps to launch terrorist atrocities around the world?
Dire Straits
Perhaps Iran's most likely action would be to close the Strait of Hormuz. Yesterday, the Iranian parliament reportedly voted to take that step.
A week ago, the United States Energy Information Administration addressed what that might mean for the global oil trade:
"The Strait of Hormuz, located between Oman and Iran, connects the Persian Gulf with the Gulf of Oman and the Arabian Sea. The strait is deep enough and wide enough to handle the world's largest crude oil tankers, and it is one of the world's most important oil chokepoints. Large volumes of oil flow through the strait, and very few alternative options exist to move oil out of the strait if it is closed. In 2024, oil flow through the strait averaged 20 million barrels per day (b/d), or the equivalent of about 20% of global petroleum liquids consumption."
The impact of such a move on global oil prices is uncertain. Citi recently gave a range, saying those prices could hit $90 a barrel or maybe $75-$78. Some believe $100 a barrel is more likely.
Inflation
Any significant increase in oil prices could have a rapid inflationary effect. Oil prices don't just hit consumers at the gas station pump; almost all manufacturing, distribution and retailing processes are heavily reliant on energy consumption largely derived from fossil fuels.
And that's where the threat to mortgage rates comes in. They almost always rise when inflation warms up.
Of course, all of this is speculative. Iran might cave. Or, if it closes the Strait, U.S. forces might open it again.
But speculation is how investors thrive: effectively, laying bets on what will happen next. It's their calculations of the odds of different scenarios emerging that will affect mortgage rates and markets generally in the coming days.
Mortgage Rate Trends: Past 90 Days
Purchase Rates
| Loan Type | Rate | APR | Daily Change | Monthly Change |
|---|---|---|---|---|
| 30-Year Fixed | 6.78% | 6.81% | +0% | -0.16% |
| 15-Year Fixed | 5.78% | 5.82% | +0% | -0.19% |
| 30-Year Fixed FHA | 6.15% | 7.35% | +0% | -0.11% |
| 30-Year Fixed VA | 6.25% | 6.4% | +0% | -0.15% |
| 30-Year Fixed USDA | 6.23% | 6.38% | +0% | +0.02% |
| 30-Year Fixed Jumbo | 7.01% | 7.03% | +0% | -0.54% |
| 5/6 Year ARM | 6.87% | 6.91% | +0% | +0.01% |
Refinance Rates
| Loan Type | Rate | APR | Daily Change | Monthly Change |
|---|---|---|---|---|
| 30-Year Fixed | 6.86% | 6.88% | +0% | -0.14% |
| 15-Year Fixed | 5.77% | 5.82% | +0% | -0.17% |
| 30-Year Fixed FHA | 6.13% | 7.32% | +0% | -0.11% |
| 30-Year Fixed VA | 6.29% | 6.44% | +0% | -0.18% |
| 5/6 Year ARM | 6.9% | 6.94% | +0% | -0.03% |
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, with events in the Middle East now rivaling them.
Mortgage rates today
Today's MarketWatch economic calendar shows three economic reports due. Two are June "flashes" (preliminary readings, subject to change) of purchasing managers' indices (PMIs), one for the services sector and the other for manufacturing. PMIs measure activity in organizations' procurement departments, so they can help gauge how the economy is holding up.
However, both today's are from S&P Global, and its PMIs tend to have less impact than those from the Institute for Supply Management (ISM). Services are expected to fall back to 53.0 from May's 53.7, and manufacturing to dip to 51.5 from 52 in May.
Today's third report covers existing home sales in May. These are expected to edge lower to 3.95 million annually from 4 million in April.
None of today's reports is typically influential over mortgage rates. And we shouldn't be surprised if markets are too dazzled by events in the Middle East to pick up on any of them.
