Your Rate's Stuck at 6.5% Until This Changes!

Inflation just hit its highest level since April 2023, and this week's numbers are a big reason mortgage rates sit where they do right now. Headline PCE rose 0.4 percent in May, pushing annual inflation to 4.1 percent, while core PCE held at 3.4 percent, still above the Fed's 2 percent target. When inflation runs hot, the Fed keeps rates higher for longer, and mortgage rates tend to follow. The average 30-year fixed is hovering around 6.5 percent and holding steady, and with oil falling considerably since May, easing gas prices could help rates improve from here. In housing, new home sales dropped 7.3 percent to their second lowest level in nearly four years. First quarter GDP grew at a healthy 2.1 percent, supported by AI investment and stronger government spending, while a softer labor market could actually pull rates lower over time.

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