Mortgage Rates This Week: Inflation Heats Up, Jobs Data Looms

Inflation, jobs data, and a packed holiday week — here’s what you need to know about mortgage rates and the housing market for the week of June 29, 2026.

Last Week in Review

Inflation stayed front and center last week. The headline PCE index rose 0.4% in May, pushing the annual rate to 4.1% — the highest we’ve seen since April 2023. Core PCE, which strips out food and energy, came in at 0.3% for the month and 3.4% year-over-year, still well above the Fed’s 2% target.

The Fed continues weighing inflation against employment as it looks toward future rate decisions. Geopolitical tensions and a resilient labor market have added to inflation worries, but oil prices have dropped considerably since May, which could help take some pressure off in upcoming reports.

On the housing side, new home sales fell 7.3% in May, landing at their second-lowest level in nearly four years — a clear sign that affordability is still weighing on buyers. We’re seeing that play out locally too: King County closed sales were down year-over-year in May, even as active inventory climbed about 17% compared to a year ago — so while fewer homes are selling, buyers here are getting a bit more breathing room and negotiating power than they’ve had in recent memory.

Meanwhile, the final read on Q1 GDP showed the economy grew at a 2.1% annualized pace, helped along by continued AI investment and stronger government spending.

Optimal Blue Rate Index

As of last Thursday, the Optimal Blue index has the average 30-year fixed rate at 6.411% — a slight improvement from what I shared with you last week.

Please note: this index reflects approximately 35% of mortgage transactions and is not a personal rate quote. You cannot lock in last week’s rate today, and factors like your credit score and loan-to-value will affect what you actually qualify for. This is intended to give you a sense of the trend, not a guarantee.

Economic Calendar This Week

It’s a short week — markets close early Thursday and reopen Monday for the Independence Day holiday. But it’s packed. Since it’s the first week of the month, we’ve got jobs data on deck: ADP on Wednesday and the BLS jobs report on Thursday. The market is expecting both to show around 110,000 jobs created, with unemployment holding steady at 4.3%.

Looking ahead, the next FOMC meeting is July 28–29, 2026.

That said, this week’s economic data will likely take a back seat to what’s happening with the war in Iran and its impact on oil prices.

Morning MBS Update

As of 9:10 a.m. Pacific time, mortgage-backed securities are flat.

In the Spotlight: Student Loan Payoffs & Cash-Out Refinances

With changes to federal student loan repayment programs taking effect July 1st, I want to make sure you’re aware of something important: if you’re paying off federal student loans through a conforming mortgage cash-out refinance, it’s not priced as a typical cash-out refi. Fannie Mae actually treats it as a rate-and-term refinance — which can make a real difference in your rate and costs.

Read the full breakdown here: Student Loan Payoff via Refinance.

If you have questions about your specific scenario — whether you’re buying, refinancing, or just trying to figure out your options — I’d love to hear from you.