The average 30-year fixed mortgage rate has inched up by two basis points this week, according to Freddie Mac. It now sits at 6.49%.This is the sixth straight week that the Freddie Mac rate has hovered around 6.5%.Mortgage News Daily’s 30-year rate also hasn’t changed much since last week. It was 6.58% on June 18, then 6.53% on June 25.Like many potential homebuyers, I’ve been anxious for mortgage interest rates to make big moves one way or the other. (Well, preferably down.) But flat interest rates feel discouraging, especially when rates are relatively high.But in my years of reporting on mortgage rates, I’ve picked up on an interesting tidbit: Flat mortgage rates aren’t necessarily bad. In fact, they can have unexpected benefits for homebuyers.Why aren’t mortgage rates moving?It feels like Americans have been fed a message about mortgage rates lately: The Iran war has caused rates to increase, so they’ll go back down once tensions in the Middle East settle down.Now, tensions are settling down. The two countries have signed a peace agreement and are taking 60 days to negotiate details before officially ending the war. The U.S. released the official announcement on June 17.So, why didn’t mortgage rates fall in the week following this announcement?”While there are hopeful signs that the tensions with Iran will be ending soon, particularly being seen in the price of oil’s dropping from $112 to $71 per barrel, bond traders are ultra-vigilant, and the yield on the 10-year Treasury has dropped only from 4.66% at its peak on May 19 to 4.39%,” Corey Burr, senior vice president at TTR Sotheby’s International Realty, told TheStreet.Related: Mortgage rate outlook shifts after inflation updateAs I previously wrote about for TheStreet, the long-awaited good news regarding the Iran war was unfortunately timed. Another major event took place on June 17: the first Federal Reserve meeting with Kevin Warsh as Chairman.The FOMC decided to leave the federal funds rate unchanged in June, but it signaled that there will be at least one rate hike before the end of 2026.The combination of good news from the White House and bad news from the Fed resulted in stagnant mortgage rates. They neither immediately dropped due to progress in the Middle East nor spiked after the Federal Reserve meeting.
Federal Reserve rates hikes will likely lead to higher mortgage rates.Bloomberg / Getty Images
Uncertainty keeps mortgage rates flatIt’s not just the timing of the news about the Iran war and federal funds rate that has kept mortgage rates steady at around 6.5%. It’s the uncertainty about what will happen next regarding both of these issues.The U.S.-Iran negotiating period lasts 60 days, but that time period is extendable. Also, there’s been some drama surrounding the reopening of the Strait of Hormuz. Overall, the situation isn’t steady enough to completely ease investor concerns.More on Mortgage Rates:Experts update mortgage rate, housing market predictionsThe magic mortgage rate that could make homes affordable againMortgage rate outlook shifts after Fed decisionInvestors have also been anxious since the June 17 Fed meeting. The Fed indicated it would raise the federal funds rate at least once in 2026. But some economic experts foresee more than one hike.Bank of America predicts three 25-basis-point rate hikes before the end of the year. Deutsche Bank expects two 25-bps hikes, according to Reuters. More brokerages have differing outlooks on what the FOMC will do.This uncertainty also makes it difficult for mortgage rates to swing one way or the other. Until there is a general consensus among the public about geopolitical and economic concerns, home loan rates may stay flat.But rather than “flat,” people may want to reframe their mindsets and think of current mortgage rates as “stable.” When rates are stable, homebuyers can enjoy some benefits.How stable mortgage rates help homebuyers”Rates have hovered around 6-6.5% over the past several weeks, and that has provided more consistent expectations for buyers,” Burr told TheStreet.When interest rates aren’t volatile, you don’t have to rush to buy a house for fear of rates spiking before closing day.I bought my first home in 2022, right when mortgage rates were starting to climb after their rock-bottom lows of the COVID-19 pandemic. I, along with everyone else in a 25-mile radius, was desperate to buy a place before rates got too high.The result? Homes went for way over their listing prices, houses sold within 48 hours of hitting the market, and I entered multiple stress-inducing bidding wars.It can be frustrating that mortgage rates are stable but relatively high. Why couldn’t they be stable and low, right?Well, one perk of rates staying in the 6.5% range is that many homebuyers who had planned to buy this summer are now waiting on the sidelines. So, if you’re still ready and financially able to buy, you’ll face less competition. This also gives you a leg up when house hunting.”If rates drop drastically in the third quarter, some buyers might feel that rates will drop even more, and they might postpone their purchase in anticipation of locking in a lower mortgage rate,” Burr said. “While this strategy seems alluring, buyers should remember that they can always refinance in the future, but finding the Golden Egg of a property that suits their budget and lifestyle is the true aim of a house search.”Related: Zillow exposes hidden threat making homes unaffordable