No mortgage rate cooldown for buyers this summer

Mortgage rates are entering this summer stuck in the mid-6% range as experts are conceding to the new rate environment. 

The 30-year fixed-rate mortgage averaged 6.49% Thursday, up two basis points from the prior week, according to Freddie Mac. The 30-year FRM has remained tethered to 6.5% for the past month, as macroeconomic developments have kept larger rate swings at bay. 

"Purchase activity eased modestly and refinance activity has continued to pick up recently, reflecting borrowers' responsiveness to current rate levels," said Sam Khater, Freddie Mac's chief economist, in a press release Thursday. 

The 15-year FRM also ticked up this week to 5.84%, from 5.81% last week, according to Freddie Mac's Primary Mortgage Market Survey. Both FRMs remain slightly down from the same time last year, and the Mortgage Bankers Association has reported demand outpacing 2025 levels. 

Today's rates close a disappointing spring homebuying season, in which the 30-year FRM was around 6.2% in late-March. Rates surged this spring on the macroeconomic impacts of the Iran War and the Strait of Hormuz drama, and saw a brief reprieve in April before settling back around 6.5%. 

Geopolitical tensions have cooled in the past week, and 10-year Treasury yields have fallen, sitting around 4.38% Thursday afternoon after hitting 4.5% earlier this week. Markets however are bracing for higher-for-longer Federal Reserve interest rates, and inflation remains hot.

Bracing for the new normal

MBA CEO Bob Broeksmit, commenting on rates Thursday, highlighted silver linings in greater year-over-year mortgage demand and rate certainty for homebuyers. 

"As economic conditions continue to evolve, greater certainty around the interest rate outlook should help foster increased borrower confidence and support sustained housing market activity," he said in an emailed statement. 

Prospective borrowers are still facing steep affordability challenges, and the MBA also reported Thursday that the median payment applied for by purchase applicants rose to nearly $2,200 in May. While experts have predicted rates to crawl down by the end of this year, it may not be enough to jolt buyers. 

"Affordability could shift from being a modest tailwind relative to last year to more of a headwind, especially for listings and sales comparisons," said Kara Ng, senior economist at Zillow Home Loans, in a statement.