The average 30-year fixed rate mortgage was 6.48% yesterday, unchanged since the day before. The 15-year fixed mortgage rate stood at 5.63%, down by 0.04%. The 30-year FHA mortgage averaged 5.81% yesterday, having dropped by 0.02. Meanwhile, the 30-year jumbo mortgage rate was 6.75%, reflecting an increase of 0.01%.
The bigger picture
Mortgage rates barely budged yesterday. Thursday's economic reports would likely have nudged them higher.
So, the bond market that determines mortgage rates was presumably focused elsewhere. And that was probably Beijing, where Presidents Donald Trump and Xi Jinping are holding a summit. Still, investors' interest in those talks remains centered on the Middle East.
"The war in Iran has cast a shadow of uncertainty on the summit," reported The New York Times yesterday evening. "The White House said Mr. Trump had pressed Mr. Xi to persuade Iran to end the war and reopen the Strait of Hormuz, the crucial waterway that has been effectively blocked since the war started. It was not immediately clear whether the United States had secured any new commitments from China."
Iran is widely regarded as China's key ally in the Middle East, and Beijing may be the only government able to get Tehran back to the negotiating table.
Today's economic reports aren't typically influential when it comes to mortgage rates. So, news from the summit or directly from the Middle East may well determine how those rates move in the coming hours.Scroll on down for details of today's economic reports and how they might affect mortgage rates.
Mortgage Rate Trends: Past 90 Days
Purchase Rates
| Loan Type | Rate | APR | Daily Change | Monthly Change |
|---|---|---|---|---|
| 30-Year Fixed | 6.48% | 6.51% | +-0% | +0.21% |
| 15-Year Fixed | 5.63% | 5.69% | -0.04% | +0.13% |
| 30-Year Fixed FHA | 5.81% | 7.01% | -0.02% | +0.15% |
| 30-Year Fixed VA | 5.94% | 6.09% | -0.05% | +0.17% |
| 30-Year Fixed USDA | 5.93% | 6.08% | +0.04% | +0.25% |
| 30-Year Fixed Jumbo | 6.75% | 6.77% | +0.01% | +0.02% |
| 5/6 Year ARM | 6.08% | 6.13% | -0.13% | +0.08% |
Refinance Rates
| Loan Type | Rate | APR | Daily Change | Monthly Change |
|---|---|---|---|---|
| 30-Year Fixed | 6.53% | 6.56% | -0.02% | +0.19% |
| 15-Year Fixed | 5.61% | 5.66% | -0.04% | +0.15% |
| 30-Year Fixed FHA | 5.8% | 7.01% | -0.02% | +0.18% |
| 30-Year Fixed VA | 5.95% | 6.1% | -0.04% | +0.21% |
| 5/6 Year ARM | 6.18% | 6.22% | -0.06% | +0.19% |
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.
You might have noticed worrying reports in the financial press about the likelihood of inflation getting worse. For example, in an e-newsletter on Sunday, The Economist wrote, "The Iran war is already causing pain for American motorists, who are paying more than $4.50 a gallon for petrol. Now Americans face a grocery-price shock."
On Monday, MarketWatch had similar concerns: "The surge in gasoline prices tied to the Iran war is set to drive U.S. inflation to a three-year high — and it might get worse before it gets better.
" ... That’s not the only downside of higher inflation," the report continued. "The increase in prices has handcuffed the Federal Reserve. The central bank is likely to be stymied from cutting interest rates aggressively, leaving the cost of borrowing painfully high for prospective home buyers and anyone who needs a big loan."
This week's price indices (the CPI, PPI and IPI )tend to add weight to these pessimistic arguments. And, with inflation rates already so high, Kevin Walsh, who was confirmed on Wednesday as the new chair of the Federal Reserve, may struggle to deliver the lower general interest rates for which he was nominated.
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 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," says 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."
Comerica Bank's weekly preview
On Monday, Comerica Bank published its weekly preview in an e-newsletter:
"This week’s CPI release is forecast to show headline inflation rose toward 4% in April and reached the highest in nearly two years, pushed up by higher gas prices. Core CPI is also forecast to pick up on the month on a hot shelter print. Part of that reflects mechanical catch-up from the gap in shelter price data during last year’s government shutdown. PPI likely accelerated to the fastest since early 2023 in April.
"The April retail sales report will likely come in soft, with consumers spending more at gas stations while reining in discretionary spending elsewhere. Industrial production likely fared better, rising moderately. Existing home sales likely rebounded in April after March’s drop, and are trending similarly to their pace last year. The median existing home's sale price likely rose in the low single digits from a year ago. The federal budget is forecast to swing to a surplus in April, but a smaller one than a year ago as tax cuts reduce revenues and as spending increases on defense and domestic security programs."
Comerica's predictions often differ from market expectations, which are a consensus of a wider pool of analysts' forecasts.
Mortgage rates today
There are three economic reports on today's MarketWatch economic calendar. However, none of these tends to have a noticeable effect on mortgage rates.
The three are:
- May Empire State manufacturing survey — Markets expect a reading of 7.0, down from April's 11.0
- April industrial production — Markets expect production to have increased that month, up to 0.2% from March's -0.5%
- April capacity utilization — Markets expect capacity utilization to have inched higher that month, up to 75.8% from March's 75.7%
Mortgage rates tend to fall when a report's actual figures are worse for the economy than expected, and to rise when they're better. When numbers are on or close to forecasts, those rates rarely move in response to the data.
No economic reports are scheduled for next Monday. Next week's big event may be the publication of the minutes of April's meeting of the Fed's rate-setting committee. That's due on Wednesday.
