Mortgage Rates Fall to 6.47% After Tentative Iran Peace Deal—Giving Buyers More Breathing Room and Freedom

Mortgage rates decreased to 6.47% for the week ending June 18, a drop of 5 basis points from the previous week's 6.52%, according to Freddie Mac. This decline follows the signing of a preliminary accord between the U.S. and Iran, which aims to foster greater economic stability. Sam Khater, Freddie Mac's chief economist, noted that incoming data indicates a resilient consumer, with improvements in retail sales and pending home sales suggesting a modest increase in purchase demand. The U.S.-Iran peace talks concluded with a memorandum of understanding on Wednesday, intended to reopen the Strait of Hormuz shipping route and lift sanctions on Iran. Realtor.com® senior economist Anthony Smith predicts that a resolution to the conflict could lower mortgage rates and boost consumer confidence and housing market momentum, though the path may be challenging. Concurrently, Federal Reserve Chairman Kevin Warsh presided over a unanimous 12-0 vote to maintain the federal funds rate between 3.5% and 3.75%, a level unchanged since December. Warsh's first decision as chair signaled a commitment to combating inflation, with the committee's statement emphasizing price stability. Market reactions included a rise in the 10-year Treasury yield and increased probabilities of a rate hike before the end of the year.