“While the Fed remains on hold, we believe this could be a good opportunity for investors to lock in relatively high yields in fixed income while they are still available,” Harvey Bradley, co-head of global rates at Insight Investment, told Bloomberg.
Economic data continues to point to a stable, if slowing, US economy. The unemployment rate has held steady for three months even as job growth downshifts, and core inflation in May rose by less than expected for the fourth consecutive month. Retail sales fell by the most this year in May, attributing some weakness to new tariffs discouraging spending on big-ticket items.
Despite ongoing geopolitical and policy risks, including efforts to overhaul cross-border taxes on U.S. businesses, the bond market has shown resilience. US Treasuries have produced a total return of 2.3% so far in 2025, with the 10-year yield now down 16 basis points for the year, despite occasional volatility related to trade policy headlines.
What this means for mortgage rates
The direction of the 10-year Treasury yield is highly consequential. Lower Treasury yields generally translate into lower fixed mortgage rates, helping to support housing demand.
As of June 12, the 30-year fixed-rate mortgage (FRM) was 6.84%, down slightly from the previous week’s average of 6.85%, according to data from Freddie Mac. The 15-year FRM averaged 5.97%, down from 5.99%.