Mortgage investors and lenders continue to digest fast-moving news about interest rates. But despite a whirlwind of activity involving U.S. tariff policies and a potentially seismic shift in secondary market activity, there has been little movement of late for mortgage rates.
At HousingWire’s Mortgage Rates Center on Tuesday, the average 30-year conforming loan rate was 7%, up 3 basis points (bps) from one week ago. Rates for 30-year loans through the Federal Housing Administration (FHA) were down 1 bps during the week to 6.68%, while rates for 30-year jumbo loans (those that exceed the conforming loan limit of $806,500) were unchanged at 6.79%.
The 30-year conforming rate has been relatively volatile since the start of the year, but its low point for 2025 came on April 11 when it reached 6.69%. That’s a higher number than many consumers and mortgage professionals would like, although home sales and mortgage demand are up from one year ago.
Fed’s Waller on inflation
At an international banking conference in South Korea over the weekend, Federal Reserve governor Christopher Waller spoke about the expectations for inflation as the global economy continues to deal with the consequences of President Donald Trump’s tariff regime.
In April, Waller laid out two separate scenarios for tariff-driven inflation that assumed a “one-time boost to prices.” These forecasts called for annualized inflation to rise to a range of 3% to 5%, depending on the severity of the tariffs, and for unemployment to rise as high as 5% in 2026.
Last week’s Personal Consumption Expenditures (PCE) report — the Fed’s preferred inflation gauge — showed that consumer prices rose 2.1% year over year in April. But while price growth is essentially at the Fed’s target level of 2%, the jobs market continues to run hotter than expected and is dampening calls to lower interest rates.
Interest rate traders are nearly unanimous that the central bank will keep benchmark rates at a range of 4.25% to 4.5% after its meeting on June 17-18, according to the CME Group’s FedWatch tool.
“Last week’s court decisions declaring a large share of tariffs illegal introduce additional uncertainty,” Waller said in prepared remarks, “but there seem to be multiple options for maintaining tariffs, so I will stick with an estimated trade weighted tariff right now of 15 percent on U.S. goods imports, which falls in between my large- and smaller-tariff scenarios.
“I see the risks of my large tariff scenario having gone down, but there is still considerable uncertainty about the ultimate levels, and thus about the impact on the economic outlook.”
GSEs to be released?
One of the hot topics in the mortgage industry over the past week is the potential release of Fannie Mae and Freddie Mac from their federal conservatorships, which have been in place since 2008. The subject received renewed attention after Trump posted on social media that he planned to take the government-sponsored enterprises (GSEs) “public” with an implicit government guarantee.
Bill Pulte, the director of the Federal Housing Finance Agency (FHFA), has publicly stated that any decision to remove the GSEs from conservatorship lies with the president. One of the major sticking points in that plan is mortgage rates, which have consistently stayed in the 7% range for much of the year despite forecasted declines.
Returning the enterprises to the private sector could mean higher borrowing costs that would further stall an already tepid housing market.
Norbert Michel, a vice president and director of the Center for Monetary and Financial Alternatives at the Cato Institute, took a strong stance on the issue of GSE reform in a written statement.
“The federal government should sell its stake in mortgage giants Fannie Mae and Freddie Mac,” Michel wrote. “The administration should also work with Congress to, at the very least, amend the companies’ charters to clarify that they no longer have a line of credit with the Treasury or a securities registration exemption.
“The U.S. mortgage market should not include government-sponsored enterprises because private firms can purchase and securitize mortgages without a federal guarantee,” he added. “Private firms should not be paired with the socialization of losses. Anything short of eliminating government sponsorship for these firms would leave in place the same system that led to the 2008 financial crisis.”
The head of the largest U.S. mortgage lender this week said he firmly believed that evidence of higher mortgage rates would derail the Trump administration’s plans for the GSEs’ release.
“If interest rates go up because of this change, I don’t think they’re going to do it,” said Mat Ishbia, president and CEO of United Wholesale Mortgage (UWM).
“Fannie Mae and Freddie Mac competing, innovating and doing different things with new leadership from Director Pulte is a big deal, and we’re already starting to see some of those positive things happening right now,” he added. “Fannie Mae and Freddie Mac acting more ‘private,” but still being in conservatorship, might be the best of both worlds.”
On Tuesday, a Bloomberg report threw a bucket of cold water on privatization plans by suggesting that the Trump administration would pursue a public offering “while maintaining a strong oversight role.” This would allow the government to generate cash flow while lowering taxes.
Fannie and Freddie are publicly traded through the over-the-counter market but have not been listed on the New York Stock Exchange since 2008.