Mortgage Rates Update: June 5th, 2025
- Bill Knudson
- Jun 8
- 1 min read
The concern is we continue to be inching towards 7.00% mortgage rates.
For a $100,000 loan at 6.85%, the monthly payment is $655.
Upcoming releases:
The next new jobs report is June 6
The next CPI release is June 11
The next Fed meeting is June 18
In this week’s analysis, economist Bill Knudson offers a measured update on the U.S. mortgage market, contextualizing a modest drop in rates within broader economic forces. With his hallmark clarity, Knudson provides a data-driven assessment of affordability and risk, tailored for financial professionals and informed homeowners.
Key Highlights:
Slight Rate Decline:The 30-year fixed mortgage rate fell 4 basis points (bp), from 6.89% to 6.85%, resulting in a $3/month savings on a $100,000 loan (now $655/month).
Payment Profile at 6.85%:
Interest accounts for 61% of the payment.
Net interest cost: $400/month.
Borrower income needed to qualify: $28,083, assuming a 3.6x income multiplier.
Market Context:
The spread between the 10-Year Treasury and 30-Year Mortgage is 245bp—77bp above the historical average of 168bp.
This elevated “safety cushion” has continued to narrow, suggesting cautious lender sentiment amid improving inflation data (CPI: 2.3%).
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