The average 30-year fixed rate mortgage was 6.42% yesterday, an increase of 0.11% since the day before. The 15-year fixed mortgage rate stood at 5.63%, up by 0.12%. The 30-year FHA mortgage averaged 5.76% yesterday, having risen by 0.09. Meanwhile, the 30-year jumbo mortgage rate was 6.82%, reflecting an increase of 0.12%.
The bigger picture
Mortgage rates are largely determined by the yield on a type of bond called the mortgage-backed security (MBS). And bond investors are highly sensitive to rising inflation rates.
You can see why. Bonds generate a fixed income, and rising prices (inflation) eat away an ever greater proportion of the value of a fixed income. So, mortgage rates tend to rise when inflation does.
Inflation was already way higher than the Fed's target of 2% annually before the war in Iran. Now, economists expect to see significantly higher inflation rates in March and beyond.
We can already see that in prices at gas pumps. According to Reuters, gas prices are up 30% since the start of the war, and the nationwide average yesterday was $3.88 a gallon. GasBuddy says that average is likely to rise above $4 next week.
But it's not just gas and other oil derivatives such as jet fuel and liquified natural gas (LNG) that are being held up in the Strait of Hormuz. Roughly 13% of the world's urea, vital for the production of fertilizers, is also stuck there.
Experts say that it could take months or years for prices of LNG to normalize. And the U.S. Energy Information Administration now expects gas prices to average $3.18 through the whole of 2027, a much higher sum than previously estimated.
In other words, inflation looks likely to prove sticky for some time to come. And that's bad news for mortgage rates.
Mortgage Rate Trends: Past 90 Days
Purchase Rates
| Loan Type | Rate | APR | Daily Change | Monthly Change |
|---|---|---|---|---|
| 30-Year Fixed | 6.42% | 6.44% | +0.11% | +0.42% |
| 15-Year Fixed | 5.63% | 5.68% | +0.12% | +0.42% |
| 30-Year Fixed FHA | 5.76% | 6.97% | +0.09% | +0.29% |
| 30-Year Fixed VA | 5.87% | 6.01% | +0.08% | +0.32% |
| 30-Year Fixed USDA | 5.8% | 5.95% | -0.04% | +0.34% |
| 30-Year Fixed Jumbo | 6.82% | 6.83% | +0.12% | +0.35% |
| 5/6 Year ARM | 6.04% | 6.08% | -0.05% | +0.26% |
Refinance Rates
| Loan Type | Rate | APR | Daily Change | Monthly Change |
|---|---|---|---|---|
| 30-Year Fixed | 6.45% | 6.48% | +0.11% | +0.39% |
| 15-Year Fixed | 5.59% | 5.63% | +0.12% | +0.4% |
| 30-Year Fixed FHA | 5.73% | 6.94% | +0.08% | +0.29% |
| 30-Year Fixed VA | 5.88% | 6.03% | +0.05% | +0.31% |
| 5/6 Year ARM | 6.08% | 6.11% | +0.05% | +0.26% |
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.
