Investor reaction to events of the past eight days has contributed to mortgage rates moving below 6.8% for the first time since the start of May, Freddie Mac said.
The 30-year fixed-rate mortgage was at 6.77% as of June 26, compared
The last time the 30-year FRM was this low was May 8,
The 15-year FRM fell 7 basis points from the prior week's survey to 5.89% from 5.96%. Compared
Why this week's rate movement help borrowers
"Borrowers should find comfort in the stability of mortgage rates, which have only fluctuated within a narrow 15-basis point range since mid-April," said Sam Khater, Freddie Mac chief economist, in a press release. "Although recent data show that home sales remain low, the resulting available inventory provides homebuyers with a wider range of options to consider when entering the market."
On June 18, the Federal Open Market Committee acted as expected and did not reduce short-term rates. But four days later, Pres. Trump initiated
While the 10-year Treasury yield fell 2 basis points on June 20, the first trading day after the FOMC meeting, it dropped 5 basis points on June 23 to 4.32%. At 11 a.m. on June 26, it was 4 basis points lower at 4.28%.
Typical patterns would find a reduction in the 10-year yield as a result of a "flight to quality" by investors looking to avoid financial and political upheaval.
What other rate trackers are reporting
Even with this week's drop in the 30-year FRM, Zillow Senior Economist Kara Ng noted it has remained in the same 6% to 7% area over the past year.
Zillow's rate tracker as of 11 a.m. Thursday morning was at 6.81% for the 30-year FRM, down by 1 basis point from Wednesday. Last week, the 30-year averaged 6.91%.
"Rates remain stuck in this range, reflecting competing economic signals: signs of a gradually cooling economy argue for lower rates, while stubborn inflation supports upward pressure," Ng said in a Wednesday evening statement. "This tension was evident in the Federal Reserve's latest Summary of Economic Projections, which downgraded forecasts for [gross domestic product] growth and increased projections for both unemployment and inflation.
Zillow's forecast is for mortgage rates to end the year near the mid-6% range.
Lender Price data posted on the National Mortgage News website put the 30-year FRM at 6.837% at 11 a.m. Thursday. This is down from 6.915% midday on June 18.
Similarly, Optimal Blue's product and pricing engine tracker had the conforming 30-year FRM at 6.724% for June 25, compared with 6.808% on June 18.
The
"Mortgage demand was flat last week as economic, financial, and geopolitical uncertainty have kept mortgage rates volatile and in the same narrow range of around 6.8%," said Bob Broeksmit, MBA's president and CEO in a Thursday morning comment on the results. "While MBA's new forecast calls for rates to decline only slightly to 6.7% by the end of 2025, annual mortgage originations volume is expected to rise 15% to just over $2 trillion."
How a possible July Fed rate cut would impact mortgages
A pair of Federal Reserve governors,
However, Melissa Cohn, regional vice president of William Raveis Mortgage, said those comments could be jumping the gun as it is too early to see how Pres. Trump tariffs could impact inflation.
Still, "The bond market has liked Bowman's and Waller's comments, and has rallied in the midst of everything going on," Cohn said. "Oil prices are way down, which helps the inflation outlook. A rate cut could cause the bond market to rally until we get the next piece of economic data or geopolitical unrest."
