The 30-year fixed-rate mortgage retreated from a nine-month high as geopolitical pressures ease and income growth outpaces home price gains
Mortgage rates pulled back this week after climbing to their highest level since last summer, offering brokers and their clients a modest reprieve from borrowing costs that have weighed on the spring housing market.
The 30-year fixed-rate mortgage (FRM) averaged 6.48% for the week ending June 4, down from 6.53% the prior week, according to Freddie Mac's Primary Mortgage Market Survey (PMMS).
A year earlier, the benchmark rate stood at 6.85%, a reminder of how little ground has been recovered in this rate cycle.
"With mortgage rates in the mid-6% range and income growth outpacing home price growth, housing affordability is marginally improving," said Sam Khater, Freddie Mac's chief economist.
The 15-year FRM also eased, averaging 5.79%, down from 5.87% the prior week and below the 5.99% recorded at the same point in 2025. That rate, widely used for refinancing decisions, has tracked a similar pattern of modest but uneven improvement.
Geopolitics, oil, and the bond market
Rates have trended higher since the conflict with Iran disrupted oil shipments through the Persian Gulf, pushing energy prices higher and keeping inflation and long-term Treasury yields elevated.
The 10-year US Treasury note yield stood at roughly 4.47% in midday trading Thursday, up from 3.97% in late February before the conflict began.
An uneasy ceasefire has helped soften that pressure, contributing to this week's pullback.
Mortgage professionals tracking that volatility have been weighing whether current levels represent a floor.
"I watched rates jump literally probably a half a point within the last three weeks," aime Rhude, a loan officer with CrossCountry Mortgage based in Florida, previously told Mortgage Professional America.
"One day you can talk to a consumer and say we're floating at this rate. The next day there's news about the war and next thing you know rates are jumping again."
Amir Nurani of Left Coast Leaders says borrowers and brokers had been pricing in falling rates, but rising inflation and energy costs are now reversing that outlook, with bond market pressures suggesting rates could move higher and potentially revisit 7%.https://t.co/3keufR20OP
— Mortgage Professional America Magazine (@MPAMagazineUS) June 2, 2026
Affordability: a slow but steady turn
The weekly data reinforces a quieter trend building beneath the surface. First American's February 2026 Real House Price Index (RHPI) showed an 11% annual gain in housing affordability across all top 100 US markets, driven by lower rates, rising incomes, and softening price growth. It's the first time every major market posted year-over-year gains since October 2024.
Meanwhile, Mortgage Bankers Association (MBA) forecasts the 30-year fixed rate will remain in the 6.1%–6.3% range through the rest of 2026, assuming inflation moderates gradually.
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