The average 30-year fixed rate mortgage was 6.25% yesterday, unchanged since the day before. The 15-year fixed mortgage rate stood at 5.46%, the same as one the day before. The 30-year FHA mortgage averaged 5.64% yesterday, having stayed the same. Meanwhile, the 30-year jumbo mortgage rate was 6.7%, reflecting no change.
The bigger picture
This week brings two highly important inflation reports: the consumer price index (CPI) on Wednesday and the personal consumption expenditures (PCE) price index on Friday. Normally, those would have the potential to set the direction for mortgage rates for weeks to come.
However, we witnessed on Friday how capable the war in Iran is of grabbing markets' attention. That day's disastrous jobs report should have dragged mortgage rates way lower.
But as the economic data were exerting downward pressure on those rates, war fears (and especially those surrounding oil prices) were pushing mortgage rates higher. In the end, rates rose, but not as much as they probably would have without the employment numbers.
Scroll on down for analysis on the war and information about today's economic reports, including their possible impacts on mortgage rates.
Mortgage Rate Trends: Past 90 Days
Purchase Rates
| Loan Type | Rate | APR | Daily Change | Monthly Change |
|---|---|---|---|---|
| 30-Year Fixed | 6.25% | 6.29% | +0% | +0.12% |
| 15-Year Fixed | 5.46% | 5.51% | +0% | +0.13% |
| 30-Year Fixed FHA | 5.64% | 6.85% | +0% | +0.02% |
| 30-Year Fixed VA | 5.73% | 5.87% | +0% | +0.04% |
| 30-Year Fixed USDA | 5.69% | 5.84% | +0% | +0.06% |
| 30-Year Fixed Jumbo | 6.7% | 6.72% | +0% | +0.21% |
| 5/6 Year ARM | 6% | 6.03% | +0% | +0.06% |
Refinance Rates
| Loan Type | Rate | APR | Daily Change | Monthly Change |
|---|---|---|---|---|
| 30-Year Fixed | 6.35% | 6.37% | +0% | +0.15% |
| 15-Year Fixed | 5.42% | 5.46% | +0% | +0.13% |
| 30-Year Fixed FHA | 5.61% | 6.81% | +0% | +0.03% |
| 30-Year Fixed VA | 5.74% | 5.88% | +0% | -0.01% |
| 5/6 Year ARM | 5.92% | 5.94% | +0% | -0.09% |
The war
The duration of the war in Iran is key to how markets and mortgage rates are likely to move in the foreseeable future. A quick resolution could bring oil prices back to normal soon, limiting the inflation the conflict might generate to a brief blip, and allowing those rates to fall.
Right now, the war is beginning to affect how much oil is being
produced. "Kuwait Petroleum Corporation began cutting oil output on
Saturday and
declared force majeure, adding to earlier oil and gas
reductions from Iraq and Qatar as the U.S.-Iran war blocked shipments
from the Middle East for the eighth consecutive day," reported Reuters on Saturday.
Storage capacity is full in many Middle Eastern countries, and with tankers trapped by Iran's control of the Strait of Hormuz, there's nowhere for newly produced oil to go. As with any commodity, reduced supply with constant demand leads to higher prices. And that could exacerbate and prolong an existing issue.
"The national average for gas prices hit $3.41 a gallon on Saturday, according to AAA, rising $0.43 in just the past week," reported NBC News over the weekend. "Meanwhile, U.S. crude oil logged its biggest weekly gain on record in data going back to 1983, a sign that gas prices could continue rising in the coming days and weeks."
NBC was right. On Sunday, the global price of oil surpassed $100 a barrel for the first time since Russia's invasion of Ukraine. And, of course, that means higher diesel prices, the fuel used by nearly all the trucks and trains that transport the U.S.'s goods and raw materials.
Last Monday, senior officials thought the war could last several weeks. That was longer than many investors had hoped. But the possibility of an even longer conflict looms.
"A [February] classified report by the National Intelligence Council found that even a large-scale assault on Iran launched by the United States would be unlikely to oust the Islamic republic’s entrenched military and clerical establishment, a sobering assessment as the Trump administration raises the specter of an extended military campaign that officials say has 'only just begun,'" said The Washington Post over the weekend.
If investors take the report seriously, that could be bad news for mortgage rates today.
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.
Mortgage rates today
There are no economic reports on today's MarketWatch economic calendar. And tomorrow's reports rarely affect mortgage rates.
Mortgage rates typically rise when important reports deliver better-than-expected economic news, and fall when that news is worse than expected. Outcomes close to expectations tend not to affect mortgage rates.
Given that no reports are due, any movement in those rates today is likely to be driven by other factors, especially news on the war (see above).
Stand by for Wednesday and Friday's inflation reports. They might well still have a considerable impact on mortgage rates. However, there's a chance that investors will see them as ancient history, given how quickly the war is affecting the current inflationary outlook.
