Mortgage rates climbed again this week. The 30-year fixed is now in the mid to high 6s, the highest level since August 2025. Buyers are asking when the Fed will finally cut. Sellers are asking what this does to the summer housing market. Here is the honest answer.

Keep in mind, mortgage rates have been pretty volatile lately, so it goes up and down on any given day. But as of May 20th the average mortgage rate on Mortgage News Daily was 6.67%, which is the highest level since August 2025.

The headline cause is the war in Iran and the inflation print that followed. April CPI came in at 3.8% annually, the hottest reading since May 2023. Higher oil prices pushes inflation up, and inflation pushes long-term rates up. We covered how the war with Iran affects the housing market in April, but the bigger story today is what the Fed is doing, and why.

Back in 2020, the Federal Reserve Bank of Chicago put together what economists call the Bullseye Chart. It maps the two things the Fed is required to balance: maximum employment and price stability. The "bullseye" sits inside this zone:

When both readings land inside that box, the Fed has no reason to act. When either drifts out, the Fed has a job to do.

Here’s where we are right now, per the latest data:

All in all, jobs and overall employment rates look fine according to the most recent BLS data. However, inflation is still a touch too hot. The Fed sees no emergency, so it sits tight. That is why the aggressive rate cuts the market was pricing in late last year haven’t shown up, and may not show up at all this year.

Jerome Powell's term as Fed Chair officially ended last Friday, May 15. President Trump's pick, Kevin Warsh, has taken over. Before the nomination, Warsh publicly called for aggressive rate cuts and big changes at the Fed. But by his confirmation hearings he was much more measured. He acknowledged that inflation is still a long-term threat and said the President never asked him to commit to cuts.

Wall Street initially expected a Warsh Fed to aggressively cut rates. Markets have since back tracked. The consensus now is even with a new chair, the Fed stays in wait-and-see mode through the rest of 2026.

Most analysts at the MBA and Fannie Mae expect the 30-year fixed to spend the rest of the year between 5.9% and 6.5%. We may dip, we may climb, but a massive drop from current rates is not in anyone's forecast.

Waiting for the Fed to rescue your rate is becoming an expensive bet.

Home prices in Utah are not crashing. Inventory is healthier, but buyer demand is steady. If you sit on the sidelines for twelve months waiting on a rate cut that may not come, you’re also paying 12 months of rent, and even if prices only climb by 3% over a single year, a $500K home is $15K more expensive the next year.

Where as buyers purchasing right now while the market is much more balanced are getting large builder incentives, seller paid buy-downs, and closing costs paid by the seller. My clients are routinely landing effective mortgage rates well below the published numbers, often by a full point or more. Those deals are available today. It’s not in the headlines, but it is common place for me to negotiate for my buyers.

Higher rates squeeze buyer affordability. But what’s also true is that higher rates squeeze other sellers who are also buying, and that is your edge.

Many Utah homeowners locked in mortgages between 2020 and 2022, which means they are sitting on rates in the 3s and low 4s. That keeps a lot of would-be sellers from listing at all. Less competition is good news for the sellers who are selling.

But your pricing and presentation have to on point. Buyers in a 6.5% rate environment are not paying for hope or potential. Homes that linger get stale fast, and a stale listing leads to a failed listing. If you have a home that you have to sell, the strategies that worked 2 years ago, are not the same strategies that work in today’s market. Working with an agent that is able to adapt quickly to the market is crucial.

Rates are climbing because inflation is sticky and the Fed sees no reason to move. A new Fed Chair has not changed that math. Waiting on a Fed cut is not a strategy. The deals being made right now are happening because the buyer or seller in those transactions found the right structure, not based off headlines.

Here to serve,

P.S. Curious what effective rate you could actually lock in right now with the right builder or seller concession? Or what your home would realistically sell for in this rate environment? Reply to this email with your situation and I'll send over a personalized analysis.