Mortgage Rates Today, Friday, May 29: A Little Higher

The average interest rate on a 30-year, fixed-rate mortgage moved in opposite directions over the past several days, according to two reports from NerdWallet, reflecting market uncertainty tied to the war in Iran and persistent inflation.

On Friday, May 29, the average rate rose to 6.43% APR, a five-basis-point increase from the prior day, according to rates provided to NerdWallet by Zillow ^[1]. By Monday, June 1, the same publication reported the average rate had dropped to 6.32% APR ^[2]. The two data points illustrate the volatility that has characterized mortgage pricing since the conflict began.

NerdWallet's Friday report noted that mortgage rates have been trending higher since the war in Iran started, citing instability in the Middle East that has rattled U.S. bond markets ^[1]. The same report said a lasting peace agreement would not cause rates to reverse course immediately but would inject calm into the markets ^[1].

The Monday report attributed the decline to markets' belief in an imminent deal to end the Iran war ^[2]. The contradictory week-over-week movement underscores how sensitive mortgage rates are to geopolitical developments.

Inflation data also weighed on the rate environment. The Federal Reserve's preferred inflation measure, the Personal Consumption Expenditures index, showed an annual rate of 3.8% in April, well above the central bank's 2% target ^[2]. The Monday report noted that inflation was already elevated before the war began on Feb. 28 and that disruptions to oil shipments through the Strait of Hormuz have added to those pressures ^[2].

The Friday report highlighted that minutes from the Fed's April meeting showed some officials growing more concerned that inflation could linger, raising the possibility that rate hikes may not be completely off the table ^[1]. Even the hint of another Fed rate hike could push mortgage rates higher, the report said ^[1].