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Today’s Mortgage Rates in June 2026
June 22, 2026
1️⃣ Gas Prices Fall Below $4 Per Gallon as Iran Deal Eases Supply Concerns
After months of elevated energy costs tied to the conflict in the Middle East, the national average gasoline price has fallen below $4 per gallon for the first time since March. The decline follows the framework agreement between the United States and Iran, along with the reopening of shipping lanes through the Strait of Hormuz.
Oil prices have retreated sharply as traders reduce expectations of a prolonged supply disruption. While consumers are finally seeing some relief at the pump, energy prices remain well above pre-war levels, and supply chains will take time to normalize.
2️⃣ Chairman Warsh Changes How the Fed Communicates
Kevin Warsh’s first Federal Reserve meeting brought a significant shift in tone. Rather than providing detailed guidance about future rate moves, Warsh is moving the Fed toward a simpler message focused on price stability and allowing markets to interpret incoming economic data on their own.
The result is less certainty about the path of interest rates and potentially more volatility in both bond and stock markets. Investors who became accustomed to the Fed signaling its next moves months in advance may need to adjust to a new era where economic data matters more and Fed forecasts matter less.
3️⃣ Iran Deal Arrives as Strategic Petroleum Reserve Nears Four-Decade Low
The timing of the Iran agreement is especially important because the U.S. Strategic Petroleum Reserve has fallen to its lowest level since 1983. Over the past several years, emergency oil reserves have been tapped repeatedly to help stabilize fuel prices and offset supply disruptions, leaving the nation with a much smaller cushion should another major energy crisis emerge.
President Trump has argued that failure to reach an agreement with Iran could lead to severe economic consequences, underscoring the importance of keeping the ceasefire intact and ensuring that oil continues to flow freely through the Strait of Hormuz. Roughly one-fifth of the world’s oil supply moves through that narrow waterway, making it one of the most important chokepoints in the global economy.
With reserves depleted and energy markets still vulnerable, maintaining stability in the region has become critical not only for national security, but also for keeping inflation and mortgage rates under control.
💡Rates & Market Outlook
Bottom Line:
Mortgage rates continue to fluctuate based on developments surrounding Iran and the future of the Strait of Hormuz. While tensions have eased following the ceasefire and ongoing diplomatic discussions, Iran has continued to threaten closure of the Strait, a move that could have significant economic consequences by disrupting a major portion of the world’s oil supply.
Rates have moved higher since last Friday as markets weigh the possibility that the ceasefire may not hold. If negotiations continue to make progress, there is room for mortgage rates to improve.
For now, we are maintaining a cautious floating bias, but only with one hand firmly on the lock trigger. Any setback in the talks could quickly reverse recent gains and push rates higher.
June 15, 2026
1️⃣ Inflation Climbs to a Three-Year High
Consumer prices rose 4.2% in May from a year ago, marking the highest inflation reading in three years. While inflation has been steadily moving higher for several months, May’s report confirmed that price pressures are broadening throughout the economy. Rising energy costs, higher transportation expenses, and increasing costs for everyday goods continue to weigh heavily on household budgets.
Inflation is now growing faster than wages, causing many families to lose purchasing power despite continued job growth. Unfortunately for mortgage rates, higher inflation generally leads investors to demand higher returns on long term bonds, placing upward pressure on borrowing costs.
2️⃣ Governments Flood Bond Markets with New Debt
Governments around the world are issuing debt at a record pace as spending continues to outpace tax revenues. The surge in bond issuance means investors are being asked to absorb an unprecedented amount of new government debt. As supply increases, bond prices often face downward pressure, causing yields to move higher.
Since mortgage rates are heavily influenced by bond market activity, this trend remains an important headwind for anyone hoping for significantly lower rates. While demand for U.S. Treasuries remains strong, the sheer volume of new debt entering the market continues to create upward pressure on long term interest rates.
3️⃣ All Eyes on Wednesday’s Federal Reserve Meeting
The Federal Reserve is widely expected to leave short term interest rates unchanged when it concludes its meeting this Wednesday. Newly appointed Chairman Kevin Warsh faces a difficult balancing act. While many expected him to pursue lower rates after being selected by President Trump, persistent inflation and uncertainty surrounding global trade and foreign policy make a near term rate cut unlikely.
Looking further ahead, artificial intelligence may eventually create meaningful deflationary pressures by dramatically improving productivity and reducing operating costs across many industries. Because of that potential, the Fed may be willing to tolerate somewhat higher inflation in the short run while placing greater emphasis on maintaining employment growth and economic expansion. For now, however, inflation remains too elevated for the Fed to justify immediate rate cuts.
💡Rates & Market Outlook
Bottom Line:
With a memorandum of understanding now in place, there is hope that the Strait of Hormuz will soon be reopened. Mortgage rates have responded favorably to the improving outlook, giving the market its first meaningful source of optimism in several weeks. We will begin the week with a floating bias. However, sentiment can change quickly, and any setback in negotiations could reverse recent improvements just as fast. Stay alert and be prepared to lock if conditions deteriorate.
June 8, 2026
1️⃣ Strong Jobs Report Pushes Mortgage Rates Higher
The May jobs report came in much stronger than expected, with employers adding approximately 172,000 new jobs during the month. Economists had been forecasting closer to 80,000 jobs, making this one of the larger upside surprises we’ve seen in recent months. The unemployment rate remained at 4.3%, while average hourly earnings increased 0.3% for the month and 3.4% over the past year.
While a healthy labor market is generally positive for the economy, it creates challenges for mortgage rates. The Federal Reserve has been attempting to slow economic growth and bring inflation under control. Strong hiring and continued wage growth suggest that inflationary pressures may remain elevated, reducing the likelihood of near-term rate cuts. Bond investors reacted quickly to the report, pushing Treasury yields higher and adding additional pressure to mortgage rates.
2️⃣ Americans Are Burning Through Savings
Inflation continues to outpace wage growth for many households, forcing consumers to rely more heavily on savings to maintain their lifestyles. The personal savings rate has fallen near some of the lowest levels seen in years as Americans spend more on groceries, utilities, insurance, transportation, and other everyday necessities.
While higher-income households have largely weathered the storm, many middle and lower-income families are finding it increasingly difficult to keep up with rising costs. This growing financial strain is one of the reasons consumer confidence remains weak despite a labor market that continues to create jobs.
3️⃣ Home Sellers Are Leaving the Market
One of the more interesting housing trends emerging this year is the growing number of sellers choosing to pull their homes off the market rather than accept lower offers. According to recent data, homes are being removed from listing services at the fastest pace since 2020.
Many sellers remain anchored to prices achieved during the housing boom and are unwilling to negotiate in today’s affordability-constrained market. As a result, inventory growth has been somewhat limited, helping prevent home prices from experiencing larger declines despite slower buyer activity and elevated mortgage rates.
💡Rates & Market Outlook
Bottom Line:
Mortgage rates continue to be pressured higher. Without an agreement negotiated with Iran that results in the reopening of the Strait of Hormuz, there is little reason to expect a meaningful improvement in mortgage rates.
Continued uncertainty surrounding global energy markets is keeping inflation concerns elevated, and the longer this situation persists, the greater the risk that mortgage rates continue moving higher. We will maintain our locking bias.
June 1, 2026
1️⃣ The K-Shaped Economy Continues to Widen
Economic data continues to paint the picture of a K-shaped economy, where higher-income households are thriving while many lower- and middle-income families fall further behind. Those who own stocks, businesses, and real estate have largely benefited from rising asset values, while millions of Americans continue to struggle with the rising cost of everyday necessities. Housing affordability remains near multi-decade lows, grocery bills continue to consume a larger share of household budgets, and utility costs have risen significantly over the past several years. For many families, simply keeping up with monthly expenses has become increasingly difficult.
The strain is becoming evident in consumer debt data. Auto loan delinquencies have climbed to some of the highest levels seen since the Great Financial Crisis, particularly among lower-credit borrowers. Credit card balances remain near record levels, and an increasing number of households are relying on debt to bridge the gap between wages and expenses.
While headline economic numbers often suggest a healthy economy, the reality on Main Street is far different for many Americans. This growing divide helps explain why consumer confidence remains weak despite strong performance in many financial markets.
2️⃣ Elon Musk Sounds Alarm on America’s Debt Problem
Elon Musk made headlines this week by warning that the United States is “1,000% going to go bankrupt” if the nation’s debt trajectory remains unchanged. While the language may be dramatic, growing concern over federal deficits and rising interest costs is becoming increasingly common among economists and market participants.
Large government borrowing requirements can place upward pressure on Treasury yields, which often translates into higher mortgage rates. The bond market continues to monitor Washington’s spending habits closely, as long-term fiscal concerns remain a significant headwind for lower interest rates.
3️⃣ Inflation Reaches Three-Year High
The latest PCE inflation report showed inflation moving sharply higher, reaching 3.8% in April, its highest level in three years. The Fed’s preferred inflation gauge climbed 0.3% from March’s 3.5% reading, largely driven by the Iran war’s impact on global energy prices. On a monthly basis, PCE increased 0.4%, following a 0.7% increase in March.
While the monthly pace of inflation slowed somewhat, the year-over-year increase is concerning and moves inflation further away from the Federal Reserve’s target. Rising inflation reduces the likelihood of near-term rate cuts and increases the risk that mortgage rates remain elevated for longer than many borrowers had hoped.
💡Rates & Market Outlook
Bottom Line:
Just one week after the Trump Administration announced that a deal with Iran was imminent, developments over the weekend painted a much different picture. Reports indicate that Iran has suspended negotiations with the United States and remains committed to blocking the Strait of Hormuz to commercial shipping. The news pushed oil prices approximately 7% higher and contributed to an increase in mortgage rates.
As we have discussed in recent weeks, a meaningful improvement in mortgage rates will likely require a lasting resolution to the conflict and the reopening of the Strait. Until an agreement is actually reached and implemented, volatility will remain elevated and any rate improvement is likely to be limited. We begin the week with a locking bias.
May 26, 2026
1️⃣ Markets May Be Overestimating the Fed’s Ability to Cut Rates
With President Trump’s new Fed Chairman now officially installed, many consumers and industry professionals immediately began assuming mortgage interest rates would begin moving lower. However, the bond market is signaling the exact opposite.
Multiple economists, including Ed Yardeni, have warned that the Federal Reserve may be forced to raise rates again as early as July to calm growing concerns from “bond vigilantes,” investors who are demanding higher yields due to rising inflation risks and expanding government debt.
The reality is that mortgage rates are driven far more by inflation expectations and bond market confidence than by political appointments. Until inflation meaningfully cools and bond yields stabilize, hopes for a sharp decline in mortgage rates may prove premature.
2️⃣ Consumer Sentiment Falls to New Record Lows
Consumer sentiment dropped to another historic low in May as inflation fears continue intensifying alongside the ongoing war with Iran. Rising gas prices, increasing transportation costs, and higher everyday expenses are placing enormous pressure on household budgets nationwide.
Inflation is now spreading well beyond energy, impacting groceries, insurance, utilities, and consumer goods across nearly every category. Many Americans are increasingly turning to credit cards and savings depletion just to maintain their current lifestyles.
Historically, collapsing consumer confidence eventually slows economic growth as consumers reduce discretionary spending. While slower economic activity can ultimately help mortgage rates improve over the long run, the immediate impact of rising inflation expectations continues creating upward pressure on bond yields and mortgage pricing.
3️⃣ Iran Peace Deal Remains Fragile as Middle East Tensions Escalate
Just days after reports surfaced that the United States and Iran were close to formalizing a broader ceasefire and reopening negotiations, the situation has once again become highly unstable. Over the weekend, the U.S. launched what it described as “defensive” strikes against Iranian military targets after reports that Iranian vessels were laying mines near the Strait of Hormuz.
At the same time, Israel significantly expanded military operations in Lebanon against Hezbollah targets, despite an already fragile ceasefire agreement remaining in place. Iran has publicly condemned both actions and warned that continued attacks in Lebanon could derail any broader agreement with the United States.
While officials on both sides continue to insist negotiations remain alive, the market is clearly growing concerned that the region may be drifting further away from peace rather than toward it. Rising geopolitical uncertainty continues to place upward pressure on oil prices, inflation expectations, and long-term bond yields, all of which remain unfavorable for meaningful improvement in mortgage interest rates.
💡Rates & Market Outlook
Bottom Line:
Mortgage rates improved today on renewed hopes that the conflict in Iran could move toward a ceasefire or broader diplomatic agreement. However, with markets reacting sharply to each new headline and conflicting reports continuing to emerge, volatility remains elevated. While there may not be an immediate need to lock, floating carries meaningful risk in the current environment. Those choosing to float should do so cautiously, with one hand on the lock trigger.
May 18, 2026
1️⃣ Inflation Comes in Hotter Than Expected
April’s CPI report showed inflation continuing to move in the wrong direction, with rising energy costs once again playing a major role. Headline inflation increased 0.6% for the month, pushing the annual rate up to 3.8%, a level not seen since May 2023. While shelter and services inflation remain stubbornly elevated, the recent surge in oil prices tied to the ongoing Iran conflict is now flowing through to transportation, food, and consumer goods pricing as well.
This creates a difficult backdrop for mortgage rates, as bond markets generally react negatively to signs that inflation is reaccelerating. The recent progress we had seen in rates has largely stalled, with today’s mortgage rates reaching a 2026 high. We can now expect mortgage rates to continue to climb as investors reassess the likelihood of higher inflation persisting longer than expected.
2️⃣ Consumers Continue to Feel the Pressure of Rising Prices
Inflation is increasingly becoming a direct strain on household finances across the country. While wages have continued to rise modestly, they are failing to keep pace with the increased cost of living for many Americans. Higher gasoline prices, rising grocery costs, insurance increases, and elevated borrowing costs are all putting additional pressure on consumer budgets.
Many families are now relying more heavily on credit cards and savings depletion simply to maintain their current standard of living. Consumer sentiment surveys continue to weaken as Americans grow more concerned about affordability and financial stability.
This matters greatly for the broader economy because consumer spending remains the primary driver of U.S. economic growth. If inflation continues eroding purchasing power at the current pace, economic growth will likely slow further in the months ahead.
3️⃣ Markets Increase Odds of Additional Fed Tightening
Following the hotter inflation data, financial markets sharply increased the probability that the Federal Reserve may need to raise interest rates again later this year. Just a few months ago, investors were expecting multiple rate cuts in 2026. Those expectations have now shifted dramatically as inflation remains well above the Fed’s 2% target.
Treasury yields moved higher after the report, with mortgage-backed securities also coming under pressure. Historically, mortgage rates tend to follow the direction of long-term bond yields, which is one of the primary reasons rates have remained elevated.
The Federal Reserve continues to face a difficult balancing act between slowing inflation and avoiding a significant economic slowdown. Unfortunately for borrowers, the latest data suggests rates may stay higher for longer than many had hoped.
💡Rates & Market Outlook
Bottom Line:
With the Iran conflict continuing to drive inflation and gas prices higher, there remains little hope for a meaningful improvement to mortgage rates. We will begin the week maintaining our locking bias.
May 11, 2026
1️⃣ Mortgage Spreads Continue Supporting Housing Stability
Mortgage spreads continue to be one of the biggest reasons housing has remained stable in 2026. Last week, spreads closed at 1.93%, helping keep national average mortgage rates near 6.44%. To put that into perspective, if spreads were still sitting at the worst levels seen in 2023, mortgage rates today would be closer to 7.62%. Even the worst spread levels from 2024 or 2025 would push rates back above 7%. Simply put, improved mortgage spreads are the primary reason the housing market has avoided another major affordability shock this year.
One of the biggest reasons spreads have improved is the continued support coming from the FHFA and the agencies through reinvestment into mortgage-backed securities. That support has helped create stronger demand for MBS pricing, thereby reducing mortgage rates. Back in 2023 and 2024, when mortgage rates reached cycle highs, the market did not have government entities helping artificially support mortgage pricing. This creates concern surrounding what may happen once the nearly $200 billion in support allocated under the Trump administration begins to wind down. Many analysts believe that could occur shortly after the November midterm elections, potentially placing renewed upward pressure on mortgage rates.
2️⃣ Labor Market Remains Stronger Than Expected
The April payroll report showed the U.S. economy added 115,000 new jobs, coming in above many economists’ expectations despite ongoing concerns surrounding inflation, high energy prices, and geopolitical uncertainty. Meanwhile, the unemployment rate held at 4.3%, continuing to reflect a labor market that remains historically healthy.
While a strong labor market is generally positive for the economy, it also creates complications for the bond market and mortgage rates. Continued job growth supports consumer spending and wage pressure, both of which can keep inflation elevated longer than the Federal Reserve would prefer. As a result, investors have become less optimistic about the timing of future rate cuts. Mortgage rates tend to perform best during periods of slowing economic activity, so stronger than expected employment data has limited the bond market’s ability to improve in recent weeks.
3️⃣ Consumer Sentiment Falls to New Record Low
Consumer sentiment fell to a fresh record low in May as surging gas prices and inflation concerns continue weighing heavily on American households. Rising fuel costs are once again putting pressure on family budgets, while uncertainty surrounding the ongoing conflict with Iran continues creating fear surrounding future inflation and economic stability.
Historically, weak consumer sentiment can eventually help mortgage rates improve because slowing confidence often leads to reduced spending and slower economic growth. However, in the near term, inflation fears tied to energy prices are having the opposite effect on the bond market. Investors remain concerned that elevated oil prices could continue feeding inflation throughout the economy, making it difficult for rates to move meaningfully lower.
💡Rates & Market Outlook
Bottom Line:
Mortgage rates remain unstable as hopes for an end to the war in Iran ignite and fade away day by day. Unless an agreement is reached, there is little hope for a meaningful reduction in mortgage rates. We maintain our locking bias.
May 04, 2026
1️⃣ Fed Holds Rates Steady, But Internal Divide Widens
The Federal Reserve held interest rates steady at its latest meeting, but what stood out was the level of disagreement among members. This marked the highest level of dissent since 1992, signaling a growing divide on how to handle the current economic environment. Some policymakers remain focused on persistent inflation risks, particularly tied to energy and geopolitical instability, while others are becoming more concerned about slowing growth and tightening financial conditions.
This type of internal conflict introduces uncertainty into the market, as investors attempt to interpret the Fed’s next move. For mortgage rates, uncertainty tends to create volatility rather than relief, keeping rate improvements limited in the near term.
2️⃣ Dalio Warns Against Rate Cuts in a Stagflation Environment
Billionaire investor Ray Dalio recently cautioned against cutting interest rates in the current environment, aligning with views that incoming Fed leadership under Kevin Warsh should remain cautious. His concern centers around stagflation, where economic growth slows while inflation remains elevated. In this scenario, lowering rates too soon could reignite inflationary pressures, particularly as supply side challenges continue to impact energy and global trade.
This perspective reinforces the idea that the Fed may need to keep policy tighter for longer than markets would prefer. For mortgage-backed securities, this creates a challenging backdrop, as inflation risk continues to put upward pressure on long-term yields.
3️⃣ Oil Prices Surge as Middle East Tensions Escalate
Oil prices moved higher after the United Arab Emirates reported intercepting cruise missiles launched from Iran, marking another escalation in an already fragile geopolitical environment. With the Strait of Hormuz remaining a critical chokepoint for global energy supply, any threat to stability in the region immediately impacts oil markets. Rising oil prices feed directly into inflation expectations, increasing costs for transportation, goods, and overall consumer spending.
This creates additional pressure on the bond market, which typically reacts negatively to inflationary signals. As a result, mortgage rates remain elevated, with limited opportunity for improvement until tensions ease and energy markets stabilize.
💡Rates & Market Outlook
Bottom Line:
Until we see actual progress on the war in Iran, there is little hope to see mortgage rates experience meaningful improvement. We maintain a locking bias.
April 27, 2026
1️⃣ Oil Prices and the Strait of Hormuz Disruption
With gas prices continuing to dominate the headlines, it is valuable to understand the formula used to estimate the national average price per gallon. When taking the price per barrel of oil, multiplying by 1.5, dividing by 42, and then adjusting by 1.2, we get a reliable estimate at the pump.
((Price per barrel of oil X 1.5) / 42) X 1.2 = Average price per gallon
Using this approach, $105 oil translates to roughly $4.50 per gallon, while $120 oil pushes prices closer to $5.14. Under normal conditions, approximately 15-20 million barrels of oil flow daily through the Strait of Hormuz. With that supply effectively disrupted, global markets are now operating with a meaningful shortfall. If this continues, the pressure on energy prices will remain, feeding directly into broader inflation and keeping financial markets on edge.
2️⃣ Consumer Sentiment Falls to Record Lows
Recent data shows consumer sentiment dropping to record low levels as Americans feel the direct impact of rising costs and geopolitical uncertainty. Inflation concerns are once again front and center, driven largely by higher energy prices and the trickle-down effect into everyday goods and services. When confidence declines to this degree, consumers tend to pull back on discretionary spending, which can slow economic growth.
While weaker sentiment can eventually help ease inflationary pressures, the near term effect is increased uncertainty. For mortgage markets, this creates a conflicting dynamic where slowing growth would normally help rates, but persistent inflation expectations continue to keep upward pressure on borrowing costs.
3️⃣ Housing Affordability Reaches New Pressure Points
The housing market is entering the spring season facing one of the most challenging affordability environments in decades. Elevated home prices combined with mortgage rates near recent highs have pushed monthly payments significantly higher than just a few years ago. Even with modest increases in housing inventory, affordability remains the primary constraint limiting buyer activity. This has led to a noticeable slowdown in demand, particularly among first time buyers who are most sensitive to rate movements.
From a mortgage rate perspective, affordability challenges alone are not enough to bring rates down. However, if reduced demand begins to meaningfully impact home prices or broader economic activity, it could eventually contribute to lower rates over time. For now, the imbalance between affordability and supply continues to define the housing landscape.
💡Rates & Market Outlook
Bottom Line:
Mortgage rates remain volatile, with current trends pushing rates higher. With rising oil prices driving inflation expectations higher, there is little hope of lower mortgage rates in the near term. We will maintain a locking bias.
April 20, 2026
1️⃣ Oil Prices Reignite Inflation Concerns
Markets continue to react to the ongoing instability in the Middle East, with oil prices moving sharply higher as tensions with Iran persist. Disruptions in the Strait of Hormuz, which accounts for a meaningful portion of global oil supply, have created renewed supply concerns and driven energy prices higher.
This matters because energy costs are one of the fastest ways to reintroduce inflation into the system. We are already seeing inflation trend higher again, with recent data showing a pickup largely driven by rising oil prices.
For mortgage rates, this creates a difficult backdrop. Higher inflation expectations push bond yields higher, which directly impacts mortgage pricing. While long term this type of shock can slow economic growth, in the near term it keeps upward pressure on rates and adds to overall market volatility.
2️⃣ Conflicting Signals Between the Consumer and Labor Market
We are seeing a growing disconnect in the data. Consumer confidence has dropped to very low levels as inflation concerns and geopolitical risks weigh on sentiment, while at the same time, the labor market continues to show resilience.
This creates a challenging environment for the Federal Reserve. A strong labor market supports continued consumer spending, which can keep inflation elevated. On the other hand, weakening confidence and tightening household budgets point toward a slowing economy.
Historically, this type of divergence does not last long. Either the labor market begins to soften, or inflation reaccelerates. Until one side gives, markets are left in a holding pattern, which is exactly what we are seeing in mortgage rates today. Volatility remains elevated, with no clear directional trend in the near term.
3️⃣ Housing Market Feels the Pressure from Elevated Rates
The housing market continues to adjust to a higher rate environment. National average mortgage rates have moved back into the 6.5% range after briefly dipping below 6% earlier this year, reducing affordability right as the spring buying season gets underway.
Builder confidence has also taken a hit, falling to a seven-month low as higher rates and rising costs weigh on both demand and new construction activity.
What we are seeing is a continuation of the “rate sensitive” housing market.
Small movements in interest rates are having an outsized impact on buyer demand. Sellers remain reluctant to move off historically low rates, while buyers are increasingly payment focused. This dynamic continues to suppress transaction volume across much of the market.
💡Rates & Market Outlook
Bottom Line:
Given the continued threats of military escalations in Iran, we begin the week maintaining a locking bias.
April 13, 2026
1️⃣ Oil Prices Surge Past $100 as Geopolitical Risk Escalates
Oil markets moved sharply higher this week, with prices breaking above $100 per barrel following reports that the United States is preparing to blockade Iranian ports after failed peace negotiations. This marks a significant shift in geopolitical risk and immediately raised concerns about global energy supply disruptions.
Higher oil prices feed directly into inflation, impacting everything from transportation costs to consumer goods. Markets reacted quickly, with bond yields showing volatility as investors attempt to price in the inflationary impact.
Historically, energy shocks of this magnitude create short term upward pressure on interest rates, which has limited any meaningful improvement in mortgage pricing despite broader economic concerns.
2️⃣ Consumer Sentiment Falls to Record Lows as Inflation Fears Build
Consumer confidence dropped to its lowest level on record, reflecting growing concern about rising prices and economic uncertainty tied to the ongoing conflict. Inflation expectations surged, with many households now anticipating significantly higher costs over the next year. This shift in sentiment matters because it can become self-fulfilling, as consumers adjust spending behavior and businesses respond by raising prices.
While a weakening consumer outlook typically signals slowing economic growth, the Federal Reserve faces a difficult position as inflation expectations remain elevated. For mortgage markets, this creates a push and pull dynamic where recessionary signals would normally help rates improve, but persistent inflation fears are keeping upward pressure on borrowing costs.
3️⃣ March Inflation Data Shows Sticky Core Pressures
The latest inflation report for March showed that while headline numbers remain somewhat contained, core inflation continues to prove stubborn. Shelter, services, and energy related categories all contributed to ongoing price pressure, reinforcing the idea that inflation is not cooling as quickly as markets had hoped.
On a year over year basis, inflation remains above the Federal Reserve’s target, and monthly readings suggest that progress has slowed. When combined with rising energy costs, there is increasing concern that inflation could reaccelerate in the months ahead.
At the same time, GDP growth has slowed to just 0.5%, signaling an economy that is losing momentum. This combination of slowing growth and persistent inflation is not ideal, but over time it may help cap how high mortgage rates can move if economic weakness becomes more pronounced.
💡Rates & Market Outlook
Bottom Line:
In the longer run, higher oil prices will add increased pressure to household budgets, likely leading to slower economic growth. With GDP already expanding at just 0.5%, we are approaching levels typically associated with recession risk. This should help soften mortgage rates over time. However, in the near term, market volatility remains elevated and inflation risks are rising. We maintain a locking bias.
April 06, 2026
1️⃣ Oil Shock Drives Inflation Fears
Global energy markets delivered one of the most aggressive moves we have seen in years, with Brent crude for physical cargo surging to roughly $141 per barrel, a level not seen since 2008.
This spike is being driven by escalating tensions surrounding Iran and the growing threat to supply routes through the Strait of Hormuz, where a significant portion of the world’s oil flows each day. As energy prices move higher, the impact is immediate and widespread, hitting everything from gasoline to transportation and manufacturing costs.
Markets are quickly repricing inflation expectations higher, which has put upward pressure on Treasury yields and mortgage rates. Historically, moves of this magnitude in oil tend to bleed into broader consumer prices over the following months, reinforcing the concern that inflation may reaccelerate just as the Federal Reserve was hoping to gain control.
2️⃣ Labor Market Remains Resilient, Complicating Fed Outlook
The March jobs report showed that the labor market continues to hold firm despite mounting economic headwinds. Job creation came in stronger than expected, with 178,000 new jobs reported. Given other data points from ADP, layoff reports, and alternative payroll tracking sources, this figure is being met with some skepticism, with many economic pundits questioning its accuracy. The bond market appears to share that skepticism, as mortgage rate pricing remained relatively stable following the release.
However, unemployment remains near historically low levels and wage growth is still elevated. While a strong labor market is generally a positive sign for the economy, it creates a challenge for inflation management. Continued wage pressure supports consumer spending, which keeps demand elevated at a time when supply constraints, particularly in energy, are intensifying. For the bond market, this combination is not ideal. Strong employment data reduces the likelihood of near term rate cuts and reinforces the Federal Reserve’s need to remain cautious. As a result, mortgage rates have struggled to find relief, as investors adjust to the reality that policy may need to stay tighter for longer than previously anticipated.
3️⃣ Inflation Pressures Reignite Amid Geopolitical Tensions
Early readings on inflation since the onset of the Iran conflict are pointing toward a renewed spike in price pressures. Energy is leading the way, but the concern extends well beyond oil, as higher input costs begin working their way through the broader economy. Initial estimates suggest that this week’s upcoming inflation reports could show a noticeable jump, reversing some of the progress made in recent months.
This shift comes at a critical time, as markets had been pricing in a gradual cooling of inflation throughout 2026. Instead, the combination of geopolitical instability and a still resilient consumer base is creating a scenario where inflation may remain sticky or even move higher in the near term. For mortgage markets, this is a clear negative, as higher inflation expectations typically translate into higher long term interest rates.
💡Rates & Market Outlook
Bottom Line:
With President Donald Trump setting Tuesday as the final day for Iran to open the Strait of Hormuz or face “hell,” this is shaping up to be a highly volatile week for mortgage rates. While a resolution could bring some relief and potentially lower rates in the near term, the risk of further escalation and higher rates remains elevated. We will maintain a locking bias.
March 30, 2026
1️⃣ Rate Volatility Driven by Geopolitics and Oil Prices
In what has become one of the most volatile stretches for mortgage rates since the pandemic era, markets closed the week with national averages climbing above 6.64% (based on Mortgage News Daily). Just weeks ago, we were seeing rates in the high 5% range before tensions escalated in late February. This past week was defined by sharp market swings, largely reacting in real time to statements from Donald Trump regarding the ongoing conflict with Iran.
Outside of lucky traders who happened to place lucrative bets on markets minutes ahead of market moving announcements, many Americans lost by paying higher gas prices and mortgage rates. While there is growing pressure globally to restore stability and reopen key energy supply routes like the Strait of Hormuz, markets remain on edge. The relationship remains clear. As oil prices move, mortgage rates are following closely behind.
2️⃣ Wealthy Consumers Signal Broader Economic Concern
A notable shift is emerging among higher income households, a group that typically shows resilience during economic uncertainty. Recent data shows that even affluent Americans are beginning to pull back as gas prices surge and stock market volatility increases.
Declines in portfolio values combined with rising everyday costs are starting to impact confidence at the top end of the market. This matters because higher income consumers drive a disproportionate share of discretionary spending and housing demand. When confidence weakens in this segment, it often signals broader economic slowing ahead. Consumer sentiment indicators are beginning to reflect this change, raising concerns that the economy may be entering a more fragile phase just as inflation pressures remain elevated.
3️⃣ Mortgage Rates Climb as Housing Market Faces New Pressure
The housing market is now directly feeling the effects of rising geopolitical tension and higher borrowing costs. Mortgage rates have increased for the fourth consecutive week, pushing affordability further out of reach for many buyers during what is typically the start of the spring buying season. This sudden rise has already led to slower application activity and increased hesitation among prospective buyers.
At the same time, inventory levels are gradually improving, but not enough to offset the affordability challenges created by higher rates. Sellers remain cautious, and many buyers are recalculating budgets in real time. Unless rates stabilize, we can expect continued pressure on transaction volume despite underlying demand for housing remaining relatively strong.
💡Rates & Market Outlook
Bottom Line:
Mortgage rates continue to show great volatility based on the news of the day. While mortgage pricing is better today that it was on Friday, there is no telling what tomorrow will bring. If you need to close in the near-term, locking remains prudent.
March 23, 2026
1️⃣ Fed Holds Rates as War Creates Uncertainty
The Federal Reserve held its benchmark rate steady at its latest meeting, signaling a cautious approach as geopolitical risks continue to rise. Officials pointed directly to the conflict in Iran as a key source of uncertainty, particularly with its potential to drive energy prices higher and disrupt global markets.
While inflation has shown some signs of cooling in recent months, the Fed made it clear that progress is fragile. Their tone suggests they are far from confident enough to begin cutting rates, and in fact, are prepared to stay restrictive longer if inflation pressures reaccelerate.
In fact, odds now favor a rate hike over a rate cut, which was not in the cards prior to the conflict in Iran. For mortgage markets, this reinforces the reality that relief is not imminent and rate volatility will likely remain elevated.
2️⃣ Producer Prices Signal Ongoing Inflation Pressure
February’s Producer Price Index came in stronger than expected, highlighting that inflation pressures are still working their way through the system. Core wholesale prices showed meaningful monthly gains, climbing by .7% up to a 3.4% annualized pace. This indicates that businesses are continuing to face higher input costs.
Historically, these costs tend to be passed along to consumers, which can stall or even reverse progress on consumer inflation. This report follows a pattern we have seen in recent months where inflation improves in some areas but remains sticky in others. For interest rates, persistent producer-level inflation reduces the likelihood of near-term Fed easing and keeps upward pressure on bond yields and mortgage rates.
3️⃣ Spring Housing Demand Meets Rising Mortgage Rates
The spring housing market is beginning to pick up, with increased buyer activity and new listings coming online. However, this seasonal momentum is being met with a sharp rise in mortgage rates, creating a challenging environment for both buyers and sellers.
Since the escalation of the Iran conflict, mortgage rates have moved noticeably higher, reducing affordability right as demand typically strengthens. This dynamic is likely to slow transaction volume and keep pressure on home prices in certain segments. While demand fundamentals remain intact due to limited inventory and demographic support, higher financing costs are clearly becoming the dominant factor shaping market activity.
💡Rates & Market Outlook
Bottom Line:
Mortgage rates are showing no signs of slowing their upward movement. Since the beginning of the conflict in Iran, we have seen an increase of approximately 0.625%. Until we see stability return to the markets, we recommend maintaining a locking bias.
