U.S. mortgage rates are staying high – and the Federal Reserve can do little about it

By — Michael J. Highfield, The Conversation Michael J. Highfield, The Conversation Leave your feedback Share Copy URL https://www.pbs.org/newshour/economy/u-s-mortgage-rates-are-staying-high-and-the-federal-reserve-can-do-little-about-it Email Facebook Twitter LinkedIn Pinterest Tumblr Share on Facebook Share on Twitter U.S. mortgage rates are staying high – and the Federal Reserve can do little about it Economy Jun 6, 2026 4:23 PM EDT This article originally appeared on The Conversation U.S. homebuyers can't get a break. The 30-year mortgage rate has been stuck at recent highs well above 6% and now averages 6.48%, according to the data released on June 4, 2026, by Freddie Mac , which bundles and sells home loans. That marks another blow for Americans hoping to buy a home or refinance their current mortgage that had been locked in at similarly steep rates. It's also a sharp jump since February 2026, when the financing cost of a 30-year mortgage had dropped as low as 6%. READ MORE: The 'biggest mistake' people make when they're falling behind on mortgage payments Pricey mortgages have been weighing on the housing market more broadly, which has not escaped President Donald Trump. He has waged an aggressive campaign to pressure the Federal Reserve, which sets the short-term benchmark rate , to make deeper cuts to the cost of borrowing. The new Fed chief, Kevin Warsh, has also been touting rate cuts since he was nominated by Trump, a reversal from his earlier anti-inflation stance. As a professor of finance , I have been asked why mortgage rates are rising even though the Fed has been keeping rates steady after a series of cuts in 2024 and 2025. The central bank actually has little control over the cost of home loans – and Americans may be stuck with high rates for a long time. How much can the Fed control mortgage rates? Not that much. The Fed directly influences the federal funds rate , a short-term interest rate that banks charge one another for overnight loans. Many people assume that mortgage rates move in lockstep with the Fed's decisions, but, in fact, they're driven primarily by financial markets. Thirty-year mortgages are long-term assets. Investors purchasing those loans, either directly or through mortgage-backed securities, are making decisions based on what they believe inflation, economic growth, government borrowing and interest rates will look like years into the future. So what does affect mortgage rates? Inflation is one of the biggest factors. Although inflation has declined substantially from the peaks experienced in 2022 and 2023 , investors remain uncertain about when it will return to the Fed's official long-term target of 2%, especially with elevated oil prices and the ongoing conflict with Iran. This uncertainty matters because when lenders originate a 30-year, fixed-rate mortgage, they're committing capital for decades. If inflation turns out to be higher than expected, the future payments that lenders receive will be worth