Each month, we bring you insights from one of the best in the business — Zack Diener of Barrett Financial Group, LLC — to help you stay informed and make confident, well-timed decisions in today’s ever-changing mortgage landscape.
The Sub-6% Dream Dies (Again): When Good News Is Bad News
Remember three weeks ago when we were celebrating rates dropping below 6%? Yeah, about that.
Today’s rates are sitting around 6.37-6.46% depending on which survey you check – a solid 40+ basis points higher than those glorious late-April lows. On a $500,000 loan, that’s roughly $125/month difference. Ouch.
So what happened? Two words: inflation report.
April’s CPI: The Party Crasher
Tuesday’s inflation report was… not great. Prices jumped 3.8% year-over-year – the highest since May 2023. Gas alone is up 28.4% annually thanks to the Iran war. Core inflation (which excludes food and energy) also ticked up to 2.8%.
Here’s the kicker: for the first time in three years, wages aren’t keeping up with inflation. Real average hourly wages actually fell 0.5% in April. Translation: people are making less buying power despite getting raises.
As one economist put it: “For consumers, that means the cost of living remains uncomfortable.”
Understatement of the year.
Why Rates Jumped
When inflation spikes, bond yields spike. When bond yields spike, mortgage rates follow. It’s that simple.
The 10-year Treasury jumped to 4.44% from the low 4.2% range we saw in late April. Mortgage rates followed right along, climbing from that beautiful sub-6% territory back to the mid-6% range.
Markets also started pricing in the possibility (about 30% odds) that the Fed might actually HIKE rates instead of cutting them. When you go from expecting cuts to fearing hikes, rates move fast.
The Ceasefire That Wasn’t (Enough)
Remember how we were all watching the April 22nd ceasefire expiration? Well, it got extended – sort of. Low-level conflict continues, oil is still elevated around $95-100/barrel, and nobody knows when it ends.
Here’s the thing: markets already priced in “war drags on at current levels.” So the ceasefire extension didn’t help rates. But the inflation spike? That hurt.
What This Means for Borrowers
The Reality Check:
At 6.37-6.46%, we’re back to where we were in early-to-mid April. Not terrible, not great. Definitely not the sub-6% we briefly enjoyed.
Historical Perspective Still Applies:
Yes, 6.4% stings after seeing 5.99%. But rates were 7.25%+ in January 2025 and hit 8% in late 2023. Anyone above 6.75-7% should still explore refinancing.
The Fed Is Still Stuck:
With inflation at 3.8% (well above the 2% target), rate cuts are off the table. Markets now see almost zero chance of any cuts in 2026. Some traders are even pricing in potential hikes.
Summer Outlook:
Most forecasters expect rates to stay in the 6.3-6.5% range through summer unless something major changes. The MBA projects 6.4% through Q4. Fannie Mae is slightly more optimistic at 6.0-6.1%.
The Spring Window:
We’re in peak homebuying season. If you’ve been waiting for perfect rates, you’re going to keep waiting. At 6.4%, rates are reasonable (not amazing, but reasonable) for qualified buyers who are ready to move.
The Bottom Line
The sub-6% window closed as quickly as it opened. Inflation came in hot, rates jumped back up, and here we are.
Is 6.4% frustrating? Sure. But it’s also still well below where we were at the start of the year, and dramatically better than 2023-2024’s 7-8% range.
If you’re waiting for rates to drop back to 5.5% or 5%, you’re betting on a peace deal in Iran AND the Fed cutting rates multiple times AND inflation coming down fast. That’s a lot of “ands.”
For borrowers who are ready to buy or refinance and can make the numbers work at 6.4%, this is still a reasonable time to act. Trying to time the perfect bottom has cost more people money than it’s saved.
The spring market is here. Inventory is decent. Rates are stable (if not spectacular). If you’re ready, move forward. If not, that’s fine too – but don’t wait just because rates aren’t “perfect.”
Perfect rarely shows up. Good enough is usually good enough.
Mortgage insights provided by Zack Diener, Barrett Financial Group
Zack Diener – Senior Mortgage Broker
Barrett Financial Group LLC
NMLS 470413 / 181106
808-349-3777
zdiener@barrettfinancial.com
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