Hello and welcome to another RUNdown on mortgage rates. Here are the major stories from the last month.
Rates are starting to sneak back near 7%. We tend to see the market slow down as we approach or go over 7% so this isn’t a great update for those still hoping to sell this year. See the below chart for the 30-year national average over the last month.
Here’s what is causing the climb and other recent developments I'm seeing:
The Middle East Ceasefire Ended
Unfortunately, some of the progress near the end of June was quickly reversed. Renewed fighting in Iran pushed fuel prices higher again, bringing inflation concerns right back into focus. The 10-year Treasury yield jumped to above 4.60%, and mortgage pricing deteriorated along with it.
The Fed Language Is Shifting
Expectations are no longer centered around when the Fed will cut rates, which was the general rhetoric for the last couple of years. A Reuters poll released last week found economists overwhelmingly expect the Fed to remain on hold for the rest of 2026, while the priced-in risk of an actual rate hike has increased to 55% in September and 87% by December because of persistent inflation and higher oil prices. That doesn't guarantee a hike is coming, but it's a meaningful change in market psychology from earlier this year.
Inflation Finally Gave Rates Some Relief
Some good news? The biggest positive development last week was CPI and PPI inflation reports that came in noticeably better than expected. Consumer inflation slowed to 3.5% annually, and core inflation declined to 2.6% for the month. That helped mortgage rates improve from a national average of 6.75% to 6.64%. This was probably the clearest evidence we've had recently that softer inflation can still move mortgage rates meaningfully lower when the data cooperates.
The “Golden Handcuffs” Are Starting to Loosen
For years we've talked about homeowners being trapped by their 2.5–4% mortgage rates. What's interesting now is that life is finally starting to win that battle. I'm seeing it across the board with my clients. People need to move because of marriages, babies, divorces, and jobs. That gradual unlocking of existing homeowners is one reason we're seeing more inventory hit the market. Active inventory nationally has climbed above 1 million homes, something we hadn't seen consistently since before the pandemic.
For years we've talked about homeowners being trapped by their 2.5–4% mortgage rates. What's interesting now is that life is finally starting to win that battle. I'm seeing it across the board with my clients. People need to move because of marriages, babies, divorces, and jobs. That gradual unlocking of existing homeowners is one reason we're seeing more inventory hit the market. Active inventory nationally has climbed above 1 million homes, something we hadn't seen consistently since before the pandemic.
Everyone Is Still Waiting for 5%
There's definitely a psychological obsession with the elusive 5-something mortgage rate. A huge number of potential buyers are essentially sitting on the sidelines waiting for rates to cross below 6%. The irony is that if rates meaningfully break into the 5s, a lot of those buyers may jump back in at the same time, likely causing increased competition and less negotiating power.
There's definitely a psychological obsession with the elusive 5-something mortgage rate. A huge number of potential buyers are essentially sitting on the sidelines waiting for rates to cross below 6%. The irony is that if rates meaningfully break into the 5s, a lot of those buyers may jump back in at the same time, likely causing increased competition and less negotiating power.
We’re about to hit 4 straight years of rates being above 6%. So much for the rise in rates being temporary! I don’t envision going below 6% anytime soon, but if we see inflation calm and the Iran War end, I think we’ll get back in the 6-6.25% range.
Monthly RUNdown - June 2026
