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Mortgage rates hold near 6.85% ahead of Fed meeting

The 10-year Treasury yield climbed as higher oil prices and Middle East tensions renewed inflation concerns, keeping mortgage borrowing costs near the mid-to-high 6% range.

Reported · Written up by our desk · Mortgages

Mortgage rates stayed in the upper 6% range as investors weighed persistent inflation risks and uncertainty ahead of the next Federal Reserve meeting, according to HousingWire. At the HousingWire Mortgage Rates Center on Tuesday, the average rate on 30-year conventional loans was 6.85%, a slight decrease from 6.86% last week.

Within government and nonconforming segments, 30-year FHA rates rose 10 basis points to 6.55%, while 30-year jumbo rates fell 3 basis points to 6.84%. HousingWire said the move reflects higher Treasury yields tied to rising oil prices and renewed Middle East tensions.

Industry experts cited the close link between mortgage rates and the 10-year Treasury yield, which has climbed on inflation fears. Benjamin Cohen of Rate said rates can change quickly when the outlook shifts, pointing to how geopolitical tensions have kept inflation risk in focus.

Ahead of the July 29 FOMC meeting, HousingWire reported that CME Group’s FedWatch tool showed 82.4% of interest rate traders expect benchmark rates to remain unchanged, down from 88% last week. Charles Goodwin of Kiavi added that hawkish Fed commentary and oil price concerns have helped push rates back into the mid-6% range.

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