Mortgage Rates Today, Thursday, June 25: Moving Higher

Mortgage rates aren’t the only thing trending higher today — the latest inflation data shows prices rose at an annual rate of 4.1% in May, the highest level in three years.

The average interest rate on a 30-year, fixed-rate mortgage jumped to 6.35% APR, according to rates provided to NerdWallet by Zillow. This is 16 basis points higher than yesterday but four basis points lower than a week ago. (See our chart below for more specifics.) A basis point is one one-hundredth of a percentage point.

Today’s latest inflation data, the Personal Consumption Expenditures Price Index, serves as the Federal Reserve’s preferred inflation measure. (For a healthy economy, the Fed prefers to see this number closer to 2%.) Data like this is one of many things that keeps mortgage rates on the move, so if you’re tracking rates day-to-day, you’re going to see a lot of volatility. Zooming out and looking at the bigger economic picture can help you see the overall trend.

For more on the Fed’s latest economic projections and what that could mean for mortgage rates, keep reading below the chart.

Last week’s Federal Reserve meeting was the first of the Kevin Warsh era, and markets are still trying to digest everything that happened — and everything that didn’t happen. Yes, the Fed didn’t change the federal funds rate, but that was completely expected and definitely wasn’t the headline news coming out of this meeting.

Backing up for a second. In his confirmation hearings and at other speaking engagements, Warsh made no secret of his belief that the central bankers, and the chair in particular, talk too much. He had also expressed dislike for the Summary of Economic Projections, particularly the ‘dot plot’ which shows the bankers’ expectations for the federal funds rate.

And indeed, Warsh declined to participate in the dot plot. (Seeing 18 dots rather than 19 implied this was the case, but he confirmed this during the press conference.) Another significant change was the Fed’s official statement which was notably shorter than had been the norm and which dropped the “forward guidance” that’s usually included.

Then there was Warsh’s press conference, where he laid out some of his plans for the Fed (five task forces to take on areas of concern) and declined to answer any questions he felt were asking him to make a prediction, or even speak to a hypothetical. It’s also unclear what the cadence of future press conferences will be.

Some level of transparency is expected, and we did get that with the SEP. Unfortunately for mortgage rate watchers, the dot plot implied we could get a rate hike by the end of this year, with the median expectation for the funds rate rising just above its current level. What we could see wasn’t terribly optimistic — and the SEP was most of what we had to go on.

Refinancing might make sense if today’s rates are at least 0.5 to 0.75 of a percentage point lower than your current rate (and if you plan to stay in your home long enough to break even on closing costs).

With rates where they are right now, you may want to start considering a refi if your current rate is around 6.85% or higher.

There is no universal “right” time to start shopping — what matters is whether you can comfortably afford a mortgage now at today’s rates.

Rate locks protect you from increases while your loan is processed, and with the market forever bouncing around, that peace of mind can be worth it.

In addition to market factors outside of your control, your customized quote depends on your:

Even two people with similar credit scores might get different rates, depending on their overall financial profiles.

Maybe — but even personalized rate quotes can change until you lock. That’s because lenders adjust pricing multiple times a day in response to market changes.

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