Mike's Weekly Rate Commentary | Home Loan Mortgage

Today’s Mortgage Rates in June 2025

Mortgage Mike
June 10, 2025 | 17 Minute Read

June 10, 2025

🔒Rate Outlook: The Locking Bias Remains

With uncertainty clouding both the fiscal and political landscape—and volatility dominating the bond market—we continue to recommend a locking bias for those in the mortgage process. A meaningful drop in rates likely hinges on:

• A major economic disruption, or
• A credible shift in fiscal policy that reins in runaway deficits.

Until then, staying conservative may be the best move.

1️⃣ Ray Dalio, Deficits, and the Growing Fear of a U.S. Default

Billionaire hedge fund manager and founder of Bridgewater Associates, Ray Dalio, just released his latest book—Principles for Dealing with the Changing World Order. In it, he doubles down on his warnings about the long-term risks facing the U.S. economy, including the real possibility of a sovereign debt crisis if policymakers fail to rein in spending. His timing couldn’t be more poignant.

Over the past week, yields on 30-year U.S. Treasury bonds surged to levels not seen since the 2023 inflation peak. This spike is rooted in a growing concern: Will the U.S. government be able to meet its long-term debt obligations? With President Trump’s recently unveiled “Big Beautiful Bill” poised to significantly increase the federal deficit, investors are becoming wary of locking up their capital for 30 years. Instead, many are flocking to short-term Treasuries, which carry far less risk and are easier to exit if the fiscal picture continues to deteriorate. 

Even high-profile voices like Elon Musk have entered the fray, warning on X (formerly Twitter) that “America is approaching a fiscal cliff that can’t be ignored.” The market is listening.

Unfortunately, this shift in sentiment means higher long-term borrowing costs, which directly impacts mortgage rates. Until policymakers address these concerns, homebuyers may continue to struggle with affordability—despite a weakening economy that would normally push rates lower.

📈 Bottom Line: Risk aversion in the bond market is putting upward pressure on mortgage rates, even when economic signals would traditionally suggest a rate cut.

2️⃣Fannie, Freddie, and the IPO That Could Shake the Mortgage Market

Since 2008, Fannie Mae and Freddie Mac have operated under federal conservatorship—essentially controlled by the U.S. government to maintain stability in the housing market. But now, President Trump is floating a bold plan: remove Fannie and Freddie from government control and launch the largest IPO in U.S. history.

On the surface, this may sound like a way to reduce federal involvement and raise billions in revenue. But the implications for mortgage rates are enormous. Privatizing these entities could mean less government backing, which translates into higher risk premiums for mortgage-backed securities. Investors would likely demand a higher return to compensate for that risk—driving mortgage rates higher across the board.

Trump has claimed on Truth Social that the government will still stand behind investors even after privatization. However, such a move would be unprecedented—and potentially illegal. Most legal scholars argue that the federal government cannot guarantee private company investors without congressional approval.

If the privatization goes through without a strong, credible guarantee mechanism, the result could be sharp and immediate rate volatility—exactly what the housing market doesn’t need right now.

🏠 Bottom Line: Trump’s proposal could usher in a wave of rate instability, especially if federal backing becomes murky or politically contested.

3️⃣Jobs Report Undershoots (Again) – But Bonds Still Get Burned

The Bureau of Labor Statistics (BLS) released the May jobs report, showing 139,000 new jobs created—slightly above expectations of 130,000. But don’t be fooled by the headline.

The bigger story is the downward revisions: a combined 95,000 jobs were erased from the March and April reports. That’s a clear sign that the labor market is losing momentum, likely under pressure from slowing business investment and the ripple effects of tariffs, which have raised input costs for manufacturers and retailers alike.

In a rational market, this should have sent bond yields lower and given mortgage rates some relief. But instead, rates ticked higher again—a reflection of deep-seated concerns about government spending, inflation risks, and global de-dollarization trends.

💼 Bottom Line: The job market is softening, but mortgage rates remain stubbornly high due to broader structural fears.

June 2, 2025

🔒Rate Outlook: Still Locking

Although we’re seeing signs of relief on inflation, tariffs and trade tensions are keeping pressure on rates in the short term. With no clear sign of a rate cut on the immediate horizon, we continue to recommend a locking bias for borrowers in the current environment.

📣 Final Thoughts

It’s easy to get lost in the headlines, but staying focused on the underlying trends helps you make smarter mortgage and real estate decisions. We’re watching the data closely—and as always, we’ll keep you informed every step of the way.

If you find these updates helpful, please forward them to a friend or colleague. The more people we can help make sense of this market, the better.

1️⃣ Tariffs Are Back—But Are They Inflationary or Deflationary?

The Fed continues to hold off on rate cuts, and one of their most talked-about reasons is the recent wave of proposed tariffs, particularly those targeting Chinese goods. Policymakers argue that these tariffs will raise consumer prices and reignite inflation.

But here’s what’s missing from the conversation: Tariffs are taxes. And like all taxes, they pull money out of the economy. That’s deflationary.

Unlike a wage increase, which circulates through the economy multiple times, a tariff simply redirects consumer money to the federal government—where it doesn’t drive demand or job growth. If retailers were required to label price hikes as a “tariff tax” rather than burying them in sticker prices, the data might show less inflation and more restraint from the Fed.

 Yes, some prices will rise—but these price hikes are different from inflation caused by excess demand or wage growth. They’re artificial and economically damaging. In fact, new research from Oxford Economics warns that tariffs could shave 0.3% off GDP over the next year if escalations continue.

Bottom line: The Fed should be just as concerned about the deflationary drag and recessionary risks these tariffs create.

2️⃣Inflation: Within Striking Distance of the Fed’s Target

The Fed’s preferred inflation gauge—the Personal Consumption Expenditures (PCE) index—was released last Friday, showing more encouraging signs:

• Headline PCE: Up just 2.1% year-over-year
• Core PCE (excludes food and energy): Still elevated at 2.5%, but trending lower

We’re now just half a percent away from the Fed’s long-standing 2% inflation target. If not for one stubborn component—Shelter costs—we may already be there. Shelter inflation is still running hot at 4.23%, but that could soon cool off.

Recent housing data shows a notable increase in inventory, with Redfin reporting a 12% year-over-year rise in active listings. As more homes hit the market, home price appreciation could flatten, helping the inflation numbers soften further.

Once shelter slows, the Fed will likely be out of excuses. A rate cut could come as early as September, depending on upcoming jobs and inflation data.

3️⃣U.S.–China Trade Tensions Are Heating Up—Again

Just weeks after signing a preliminary trade framework, tensions between the U.S. and China have reignited. The latest spark? A series of U.S. restrictions targeting advanced technologies:

• Export controls on AI chips and semiconductor tech
• Blocked sales of electronic design automation (EDA) software
• Revoked visas for Chinese students in STEM fields

In response, Beijing has vowed “resolute and forceful measures,” threatening retaliatory tariffs and restrictions on American firms operating in China.

Treasury Secretary Scott Bessent confirmed that negotiations have stalled, and that the White House is working to set up a high-level meeting between President Trump and President Xi to salvage talks.

 These geopolitical tensions are already rattling financial markets. The bond market—highly sensitive to global risk—is experiencing renewed volatility, which is putting upward pressure on mortgage rates.

May 27, 2025

⏳Rate Outlook: Locking Remains the Safer Bet

Until we see mortgage rates break below their 200-day moving average (a key technical indicator used by traders), the base-case scenario remains a locking bias. Rates are still reacting to headline risks like tariffs, government spending, and inflationary pressures.

However, keep in mind—economic trends can shift quickly. A surprise move by the Fed, weaker-than-expected jobs numbers, or a cooling inflation print could spark the next leg down in rates. We’re watching it all closely.

1️⃣ Bond Market Jitters Sparked by GOP Spending Bill

Last week, the bond market was rattled after the House passed a sweeping GOP spending bill. The concern? A potential surge in the national deficit. According to updated projections from the nonpartisan Congressional Budget Office (CBO), the bill could add as much as $3.8 trillion to the federal debt over the next decade. That’s on top of an already eye-watering $34.9 trillion tab—and climbing.

A rising debt load means the U.S. Treasury will be forced to auction even more bonds to cover government expenses. But in a market already flooded with supply, investors are demanding higher yields to take on the additional risk. This upward pressure on bond yields is especially relevant for homebuyers, since mortgage rates closely track the yield on the 10-Year Treasury.

Add in Moody’s recent downgrade warning on U.S. credit quality, and it’s no surprise mortgage rates are staying elevated. The bill now heads to the Senate, and if it clears, President Trump is expected to sign it into law.

2️⃣Home Sales Drop to Post-Crash Levels

If 2024 felt slow for housing, 2025 is on pace to feel even worse. April’s seasonally adjusted existing home sales fell another 0.5% month-over-month, down to an annualized pace of 4.0 million homes—the lowest April total since 2009. For context, that was at the tail end of the Great Recession and housing collapse.

On the flip side, inventory is rising. The number of existing homes for sale in April jumped 21% year-over-year, offering buyers more options but also signaling hesitation from sellers eager to offload properties in a sluggish market.

The three-headed monster behind the slowdown?

• Mortgage rates holding near recent highs
• Record-setting home prices in many regions
• Widespread economic uncertainty

Until mortgage rates ease meaningfully, it’s likely we’ll continue to see this standoff between buyers and sellers.

3️⃣Tariffs Return – This Time, on Your Phone

Trade tensions escalated sharply after President Trump announced new tariffs, including:

• A 50% tariff on all goods imported from the European Union
• A 25% tariff on all iPhones manufactured outside the U.S.
• The same 25% tariff applied to Samsung phones and other non-U.S.-made devices

The move marks one of the boldest protectionist steps yet, and it’s hitting close to home. Smartphones are an everyday essential, and these new taxes could raise prices by hundreds of dollars per device.

Markets didn’t take the news well. Technology stocks tumbled, and inflation concerns spiked—two key drivers behind last week’s increase in mortgage rates.

May 19, 2025

🏠 Strategy and Outlook: Stay Defensive, Lock Smart

Mortgage rates continue to face upward pressure as markets search for clarity and confidence in the broader economic picture. While there may be brief windows of opportunity to lock in lower rates on favorable days, we continue to recommend a locking bias in this environment.

Volatility remains elevated, and timing the market has become increasingly difficult. For clients purchasing or refinancing in the near future, the best strategy is to work closely with a trusted mortgage advisor, consider options like temporary buydowns, and be ready to act quickly when pricing dips.

1️⃣ U.S. Treasury Downgrade Sends Ripples Through Mortgage Markets

For decades, U.S. Treasuries have been regarded as the safest and most stable investment in the global economy. That perception is starting to shift.

A recent downgrade in the U.S. credit outlook has rattled investors, prompting concern over our government’s ballooning federal deficit, which now approaches $37 trillion. Compounding this are rising interest rates, which have dramatically increased the cost of servicing existing debt. As the government rolls over maturing bonds, it’s now doing so at significantly higher rates—effectively crowding out investment in other sectors and increasing the long-term cost of borrowing.

Markets reacted swiftly. Mortgage rates inched higher on the announcement, though the full impact will play out over time as institutional investors adjust their models to factor in greater risk. The higher yield now required to attract investment means that upward pressure on long-term mortgage rates could persist until fiscal confidence is restored. 

2️⃣Consumer Sentiment Drops to Second Lowest Level on Record

New data from the University of Michigan’s Consumer Sentiment Index shows that confidence in the U.S. economy has plunged—hitting the second lowest point since tracking began. The culprit? Inflation expectations and rising concerns over tariffs.

 Recent tariff announcements, especially those targeting Chinese electric vehicles and key raw materials, have stoked fears of supply chain disruptions. Many consumers remember the empty shelves and price spikes of the pandemic era—and fear a repeat. If critical goods become harder to source, expect prices to surge and consumer spending to fall further. This is a critical watchpoint as the economy navigates uncertain terrain.

3️⃣Housing Market Activity Stalls as Buyers Wait on Rates

With mortgage rates rising and affordability stretched thin, more prospective homebuyers are hitting the pause button. According to Redfin and Realtor.com data, the number of homes under contract has declined for four straight weeks, and new mortgage applications fell again last week.

High interest rates have sidelined many would-be buyers who are unwilling to lock in at today’s rates. At the same time, sellers who secured ultra-low rates during the pandemic are reluctant to list their homes and give up that advantage. The result? A standoff, and a housing market that is freezing over in many parts of the country.

Builders are beginning to respond with greater incentives—including rate buydowns and price reductions—but until we see a meaningful decline in rates or a shift in Fed policy, activity is likely to remain sluggish.

May 12, 2025

🏠 Mortgage Rate Watch: The Trend Has Turned

Mortgage rates have officially broken out of their long-term downward trend and are now moving higher. With volatility still high and inflation concerns growing, we’re maintaining a locking bias for those in the market. The path forward remains uncertain, and rate dips may be brief.

In a market like this, clarity matters. If you’re buying, refinancing, or just curious about your options, now is the time to get a second opinion. Even a slight improvement in your rate could mean thousands in savings over the life of your loan.

🔍 Bottom Line

We’re entering a high-stakes season for the U.S. economy. The full impact of tariffs hasn’t hit consumers yet, but it’s coming. If the Fed misjudges the moment, we could find ourselves fighting inflation with the wrong tools—and missing the bigger risk of a slowdown. Meanwhile, mortgage rates are trending up, making it more important than ever to stay informed and act strategically.

1️⃣ A Symbolic Win, But Not a Game-Changer

The Trump administration recently announced its first trade agreement with the United Kingdom—a noteworthy step, though modest in size. The UK represents just under 4% of total U.S. trade. But what makes this deal strategically important is that the U.S. already maintains a trade surplus with the UK, meaning we export more to them than we import. In President Trump’s transactional view of trade, that’s a win—boosting U.S. GDP by selling American-made goods abroad.

This aligns with his broader vision of reshaping global trade relationships to favor the U.S. by prioritizing deals that reduce our trade deficits. But with a stated goal of securing 200 bilateral trade deals, this agreement—while welcome—is only a small piece of a much larger and more complex puzzle.

2️⃣📉 The Fed Stays Put—But Should They Have?

This week, the Federal Reserve opted to leave interest rates unchanged, despite growing economic headwinds from the tariff war. Fed Chair Jerome Powell continues to walk a tightrope between inflation control and economic stability. The problem? Tariffs—like the 145% duties now being applied to some Chinese imports—act as a tax on consumers and businesses. And interest rate hikes don’t solve tax-driven inflation.

History hasn’t been kind to the Fed when it comes to timing. They often hold rates too high for too long or keep them too low until inflation flares up. If Powell waits too long to shift course, the economy could tip into recession. With the labor market showing signs of cooling and consumer confidence dropping, the Fed’s delayed reaction could prove costly.

3️⃣🚢 Tariffs Are Arriving—Literally

Cargo ships loaded with tariff-hit goods are now docking on the West Coast, bringing with them price increases that will soon show up on store shelves. Although April’s inflation reports won’t reflect these changes yet—many companies stockpiled inventory ahead of tariff enforcement—the real impact is expected to show up in the next four to six months. 

Business owners are already warning of price hikes, which could push inflation higher through the summer. That spells trouble for interest rates, as inflation is the bond market’s worst enemy. Mortgage rates tend to rise when inflation heats up, putting additional pressure on affordability in an already strained housing market.

May 5, 2025

Confidence Cracks, But Is Help on the Way?

When consumers lose confidence, the ripple effect can be felt across the entire economy. The April Consumer Confidence Index dropped to its lowest level since the pandemic shutdowns—a clear warning sign that many Americans are growing uneasy about their financial futures. That anxiety is showing up in the housing market: more and more potential home sellers are pulling their listings, discouraged by high mortgage rates, shaky buyer demand, and general uncertainty.

But here’s the twist: mortgage rates have recently shown hopes of wanting to fall, and if the trend continues, it could be the catalyst that reignites activity across the housing market. Lower rates give buyers more purchasing power and give sellers confidence they can both sell and rebuy affordably. We’re not there yet—but the door is beginning to crack open.

📊 April Jobs Report Surprises—But Don’t Be Fooled

Friday’s Bureau of Labor Statistics (BLS) report showed 177,000 new jobs added in April, far exceeding the 133,000 that economists predicted. At first glance, this seems like bad news for mortgage rates, since strong job growth typically delays Fed rate cuts. As a result, rates ticked higher following the report.

But don’t be too quick to draw conclusions. Underneath the headline number, there are signs of softness in the labor market. Temporary employment is falling, job openings are declining, and wage growth is cooling. These are classic early indicators that broader job losses may be coming. Like Wayne Gretzky once said—great players skate to where the puck is going, not where it’s been. If the Fed plays offense instead of reacting late, a rate cut could still be in the cards this summer.

The Fed Can’t Fix Tariffs—And That’s a Big Problem

The Federal Reserve’s primary tools—raising or cutting interest rates—are designed to stimulate or restrict demand. But they can’t stop the kind of inflation that’s now creeping in from tariffs. Tariff-driven inflation is different. It doesn’t increase corporate profits. It doesn’t push up wages. It acts like a tax on the consumer, pulling money out of the economy and into government coffers.

That’s why this form of inflation is deflationary in disguise. It hurts consumer spending, slows the economy, and makes it harder for businesses to raise wages. And it puts the Fed in a tough position—one where cutting rates may actually help stabilize growth without fueling more inflation.

📉 Mortgage Rate Watch: Holding the Line

Mortgage rates are still battling resistance at their 200-day moving average—a key technical indicator that traders watch closely. For now, they’ve failed to break below. That means locking in your rate remains the safer play in the short term.

But all eyes are on the Federal Reserve’s meeting this Wednesday. If the Fed softens its tone or signals future cuts, we could see rates begin a more decisive move downward.

🔍 Bottom Line

Consumer confidence is shaky, but relief may be on the horizon. The job market isn’t as strong as it looks, tariffs are quietly undermining growth, and the Fed may still have a window to act. If you’re a homebuyer or refinance shopper, now is the time to pay close attention—opportunities could be just around the corner.