The average 30-year fixed rate mortgage is 6.62% today, unchanged since yesterday. The 15-year fixed mortgage rate stands at 5.78%, up by 0.01%. The 30-year FHA mortgage now averages 5.93%, having dropped by 0.02. Meanwhile, the 30-year jumbo mortgage rate is 6.84%, reflecting an increase of 0.05%.
The bigger picture
Mortgage rates climbed appreciably on Friday. And they're now at their highest level since Mar. 27.
So far, there's little sign of a worthwhile fall today. "U.S. stock-index futures fell and crude prices rose on Sunday, after the
market’s rally stalled last week as oil prices rose sharply amid the impasse in the war with Iran," said MarketWatch yesterday evening.
Friday's rise was mainly a result of disappointment on Wall Street about last week's summit in Beijing. Investors had hoped that the U.S. would be able to get China to intervene with Iran to open the Strait of Hormuz and bring the Arabian Gulf conflict to a swift conclusion.
However, there was little reason on Friday to believe that any such commitment had been secured. And that could see the disruption of global oil supplies drag on for the foreseeable future.
Mortgage Rate Trends: Past 90 Days
Purchase Rates
| Loan Type | Rate | APR | Daily Change | Monthly Change |
|---|---|---|---|---|
| 30-Year Fixed | 6.62% | 6.65% | +0% | +0.4% |
| 15-Year Fixed | 5.78% | 5.84% | +0.01% | +0.38% |
| 30-Year Fixed FHA | 5.93% | 7.14% | -0.02% | +0.31% |
| 30-Year Fixed VA | 6.1% | 6.25% | +0.01% | +0.39% |
| 30-Year Fixed USDA | 6% | 6.15% | -0.01% | +0.4% |
| 30-Year Fixed Jumbo | 6.84% | 6.86% | +0.05% | +0.12% |
| 5/6 Year ARM | 6.19% | 6.25% | -0.01% | +0.19% |
Refinance Rates
| Loan Type | Rate | APR | Daily Change | Monthly Change |
|---|---|---|---|---|
| 30-Year Fixed | 6.68% | 6.72% | +0.01% | +0.42% |
| 15-Year Fixed | 5.77% | 5.82% | +0.02% | +0.42% |
| 30-Year Fixed FHA | 5.92% | 7.13% | -0.03% | +0.32% |
| 30-Year Fixed VA | 6.1% | 6.25% | +0.01% | +0.41% |
| 5/6 Year ARM | 6.44% | 6.49% | +0.05% | +0.54% |
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 May 10, 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 May 11, 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."
Last 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."
Mortgage rates today
There are no economic reports on today's MarketWatch economic calendar. And few reports due this week are likely to move mortgage rates far.
We'd normally make a fuss about the minutes, scheduled for release on Wednesday, of the last meeting of the Federal Reserve's rate-setting committee. These publications can be influential.
However, we'll be surprised if these minutes are. Inflation is currently running too warm for the Fed to cut general interest rates anytime soon, and some on Wall Street are now wondering whether a rate hike is going to be the next change in rates.
