Another factor is inflation, which remains persistently higher than the Fed’s target of 2 percent. The Labor Department reported that inflation had edged up to 2.4 percent in May, an uptick from April, but still tame enough to relieve some of the pressure on mortgage rates.

Average mortgage rates in June are 62 basis points down on the same period last year and mortgage applications are up 41.7% year-on-year.

Current mortgage rates are down and lower than they were seven days ago and in early 2025, when the average 30-year fixed-rate mortgage reached above 7%. Even though Federal Reserve policy doesn’t directly impact today’s mortgage rates, they have been easing since the Fed began cutting rates in late 2024.