Despite a fresh PCE inflation reading of 4.1%, the 30-year fixed rate edged up just two basis points
The 30-year fixed mortgage rate ticked up just two basis points this week to 6.49%, extending a six-week stretch of near-flat movement as fresh inflation data reinforced what bond markets had already priced in: rates staying higher for longer.
Freddie Mac's Primary Mortgage Market Survey, released Thursday, showed the 30-year fixed-rate mortgage (FRM) averaging 6.49% as of June 25, up from 6.47% the prior week.
The 15-year FRM averaged 5.84%, up from 5.81%. A year ago, the 30-year benchmark stood at 6.77%, meaning today's rate is more than 28 basis points below where it was 12 months ago, a comparative relief, albeit a modest one.
"Rates have remained relatively stable over the last six weeks. Meanwhile, 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.
Stability in the face of inflation
Thursday's reading landed alongside the Bureau of Economic Analysis's May Personal Consumption Expenditure (PCE) report — the Federal Reserve's preferred inflation gauge — showing headline PCE rising to 4.1%, its highest reading since April 2023.
Core PCE, which strips out food and energy, came in at 3.4%, well above the Fed's 2% target.
That rates barely moved on such a significant inflation day reflects how thoroughly bond markets had already absorbed the bad news.
Treasury yields, which directly influence mortgage rates, have been under sustained pressure in recent sessions even as inflation remains elevated.
For brokers counseling clients, six weeks of stability at a historically elevated level is a double-edged signal. Melissa Cohn, regional vice president at William Raveis Mortgage in New York, told Mortgage Professional America in the wake of last week's Iran ceasefire announcement that current conditions are filtering out all but essential borrowers.
"Those people who must move and those people who must refinance will be doing so," she said. "But there are people who still don't like the rate environment that we're in today, and it's keeping them on the sidelines."
A cautious read on housing recovery
There are tentative signs of adjustment in the broader market. Existing home sales rose 3.2% in May to their highest level since December, according to National Association of Realtors (NAR) data, and inventory has been building steadily across major US metro areas through the spring season.
Listing prices have fallen on a year-over-year basis for seven consecutive months, suggesting sellers are recalibrating. New home sales and construction starts, however, continue to face the same affordability headwinds that have defined the 2026 housing market.
Bank of America's recent warning of three Fed rate hikes before year-end underscores just how precarious this relative calm may be. BofA economist Aditya Bhave now forecasts 25-basis-point increases in September, October, and December — which would lift the federal funds rate to 4.25%–4.50% — with no prospect of cuts until 2028.
CME FedWatch, which predicts upcoming Fed rate moves based on 30-day Fed Funds futures prices, predicts a rate hike in September. It shows a 70% chance of a hold at the next meeting in July, but a 62% chance of a hike in September.
If additional hikes materialize, long-term bond yields would face fresh upward pressure, and the 6.5% level that has so far held steady could become a floor rather than a ceiling. For now, the six-week stretch of calm may represent as good a window as 2026 is likely to offer buyers ready to act.
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