Mortgage Interest Rates Forecast

Mortgage rates today: Friday, June 9, 2023

On Friday, June 9, 2023, the average interest rate on a 30-year fixed-rate mortgage dropped 31 basis points to 6.698% APR. The average rate on a 15-year fixed-rate mortgage fell 32 basis points to 5.824% APR, and the average rate on a 5-year adjustable-rate mortgage went down five basis points to 7.524% APR, according to rates provided to NerdWallet by Zillow. The 30-year fixed-rate mortgage is three basis points lower than one week ago and 126 basis points higher than one year ago. A basis point is one one-hundredth of one percent. Rates are expressed as an annual percentage rate, or APR.

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Mortgage rates this week

Fixed mortgage rates dropped in the week ending June 8 as it dawned on investors that the Federal Reserve might not raise short-term interest rates this month.

• The 30-year fixed-rate mortgage averaged 6.85% APR, down 17 basis points from the previous week's average.

• The 15-year fixed-rate mortgage averaged 5.98% APR, down 17 basis points from the previous week's average.

• The 5-year adjustable-rate mortgage averaged 7.5% APR, up four basis points from the previous week's average.

The mortgage market doesn't wait around for the Fed to act. Instead, mortgage rates usually move up or down according to what the central bank is expected to do at its next meeting. So by the time the Fed announces a federal funds rate increase, mortgage rates usually have already gone up because the market anticipated the central bank's action.

But what about when the market's expectations shift in the run-up to a Federal Reserve meeting? We found out this week.

First, let's go back to the middle of May. Investors then assumed that the Fed would probably raise rates at the end of its June 13-14 meeting. Mortgage rates ratcheted upward in the second half of the month in anticipation of a Fed rate hike.

The outlook changed when the Wall Street Journal ran an article on May 31 that said Fed officials were "increasingly likely to hold interest rates steady at their June meeting before preparing to raise them again later this summer." Mortgage rates fell for a few days after that article was published as the market acclimatized to the possibility of a pause in Fed rate hikes.

Then on June 2, a paradoxical employment report for May was released. It showed job growth, yet the unemployment rate went up. The market eventually concluded that vigorous job creation had increased the odds of a Fed rate hike. Mortgage rates trended upward June 6-8, but not enough to offset the declines in the weekly averages for fixed rates.

There is still uncertainty about what the Fed will do at its June meeting and whether it will raise the federal funds at its subsequent meeting at the end of July. The lack of clarity could cause mortgage rates to yo-yo over the next few months.

At least one bit of uncertainty has been removed: The standoff over the debt ceiling was resolved, eliminating another source of upward pressure on mortgage rates.

» MORE: Why mortgage rates could rise in June