Key facts
- Rates for 30-year conforming loans averaged 6.77%, up 4 basis points from the previous week.
- 30-year jumbo loan rates rose 9 basis points to 6.75%.
- 30-year FHA loans saw a 6 basis point increase to 6.35%.
- Median inflation expectations for one year from now increased to 3.7% in June.
- Median estimates for annual home price growth dropped to 3.2%.
Mortgage rates have resumed their upward trajectory, with 30-year conforming loans averaging 6.77%, an increase of 4 basis points from the previous week. This rise follows hawkish statements from the Federal Reserve regarding inflation and monetary policy. Rates for 30-year jumbo loans increased by 9 basis points to 6.75%, and FHA-backed loans rose by 6 basis points to 6.35%.
Last week had seen a brief decline in mortgage rates, which supported borrower interest and slightly boosted home purchase demand. Bob Broeksmit, CEO of the Mortgage Bankers Association, noted that a more balanced housing market with improving inventory and moderating home-price growth could bolster activity through the summer.
Consumer expectations for inflation remain a concern. The Federal Reserve Bank of New York's Survey of Consumer Expectations for June indicated that median inflation expectations for one year ahead increased to 3.7%, the highest since September 2023. This comes as the Consumer Price Index (CPI) in May climbed to an annual rate of 4.2%.
However, the survey also revealed a drop in median estimates for annual home price growth to 3.2%. Data from Cotality showed a 0.8% year-over-year home price increase in May, with stronger growth in Midwest states and San Francisco, while markets like Austin and Cape Coral show signs of stabilization. Cotality expects national price growth to accelerate to 4.8% by April 2027.
Mat Ishbia, CEO of United Wholesale Mortgage, suggested that the Federal Reserve, under new Chair Kevin Warsh, might lead to lower rates in the next six to 12 months, especially if geopolitical conflicts and inflation ease. He also views potential changes to FHA loan minimum property requirements positively, believing they could streamline the process. Ishbia also highlighted industry concerns about pending GSE regulations for condominium projects, with many professionals seeking a delay due to potential disruptions in the condo market.