The average 30-year fixed rate mortgage was 6.44% yesterday, unchanged since the day before. The 15-year fixed mortgage rate stood at 5.65%, the same as one the day before. The 30-year FHA mortgage averaged 5.81% yesterday, having stayed the same. Meanwhile, the 30-year jumbo mortgage rate was 6.59%, reflecting no change.
The bigger picture
Mortgage rates just inched higher on Friday. A slightly better-than-expected consumer sentiment report may have contributed. But we suspect most eyes were on the Strait of Hormuz.
"The U.S. and Iran exchanged blows Saturday in the Persian Gulf, extending fighting around the Strait of Hormuz into a third day and testing a fragile ceasefire
meant to end months of hostilities," was The Wall Street Journal's summing up yesterday morning.
Later yesterday, AP reported, "Iran again launched drone and missile attacks targeting Bahrain and Kuwait on Sunday following new U.S. airstrikes against the Islamic Republic, and threatened a 'complete halt' in negotiations to end the war if Washington continues its attacks." Then, yesterday evening, the two sides agreed to stop their hostilities and resume talks, according to The Journal. However, early this morning, The New York Times said Iran was yet to confirm its agreement.
No economic reports are scheduled for release today. And, of course, none are due on Friday, which is an early holiday to mark Saturday's Independence Day.
Bond markets will be closed on Friday, which means mortgage rates won't move. So, we won't be publishing this daily report that day.
Before then, on Thursday, we're due June's jobs report, which is usually the most influential of all economic reports. If it provides any shocks, we could head into the holiday weekend with mortgage rates much higher or lower. Unfortunately, nobody knows which.
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Mortgage Rate Trends: Past 90 Days
Purchase Rates
| Loan Type | Rate | APR | Daily Change | Monthly Change |
|---|---|---|---|---|
| 30-Year Fixed | 6.44% | 6.48% | +0% | -0.03% |
| 15-Year Fixed | 5.65% | 5.71% | +0% | +0% |
| 30-Year Fixed FHA | 5.81% | 7.03% | +0% | -0.07% |
| 30-Year Fixed VA | 5.94% | 6.1% | +0% | -0.09% |
| 30-Year Fixed USDA | 5.88% | 6.04% | +0% | -0.01% |
| 30-Year Fixed Jumbo | 6.59% | 6.61% | +0% | -0.19% |
| 5/6 Year ARM | 6.15% | 6.23% | +0% | +0.12% |
Refinance Rates
| Loan Type | Rate | APR | Daily Change | Monthly Change |
|---|---|---|---|---|
| 30-Year Fixed | 6.5% | 6.54% | +0% | -0.04% |
| 15-Year Fixed | 5.61% | 5.67% | +0% | -0.02% |
| 30-Year Fixed FHA | 5.81% | 7.02% | +0% | -0.07% |
| 30-Year Fixed VA | 5.95% | 6.04% | +0% | -0.08% |
| 5/6 Year ARM | 6.1% | 6.18% | +0% | -0.08% |
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
April's price indices (the CPI, PPI, IPI and PCE) tend to lend weight to pessimistic arguments about future inflation rates.
May's consumer price index and producer price index, published on Jun. 10 and 11, respectively, were even worse than April's. Meanwhile, May's import price index, released Jun. 16, came in worse than markets were expecting. May's PCE price index is due today.
Those reports landed well after the last meeting of the Federal Reserve's rate-setting committee. Minutes of that meeting were published on May 20 and included the following:
"Almost all participants noted that there was a risk that the conflict in the Middle East could persist for an extended period or that, even after the conflict ended, the prices of oil and other commodities could remain elevated for longer than expected. In such scenarios, these participants expected continued upward pressure on inflation arising from supply chain disruptions, high energy prices, or the pass-through of higher input costs to other prices. The vast majority of participants noted an increased risk that inflation would take longer to return to the Committee’s 2 percent objective than they had previously expected."
Bottom line: "A majority of participants highlighted ... that some policy firming would likely become appropriate if inflation were to continue to run persistently above 2 percent." Policy firming is Fedspeak for a rate hike.
We should get the minutes of the Jun. 17 meeting roughly three weeks from that date. But events surrounding that showed committee members all but ruling out a further cut to general interest rates this year. And almost half of them now expect a hike in 2026.
Bond markets vs. stock markets
Mortgage rates are largely dictated by 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 are no economic reports on today's MarketWatch economic calendar.
What's next?
By far the most important event scheduled this week is the jobs report for June, which is due on Thursday. Bond markets will be closed on Friday, so we shall not be publishing this report that day.
Of course, significant developments in the Middle East would likely upend everything and may even overshadow the jobs report. For lower mortgage rates, we should hope that the chances of an abiding peace continue to improve.
