Shopping for a mortgage rate before the June Fed meeting could make sense for borrowers right now.
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So much for improvement in the mortgage interest rate space. After dropping by around a full percentage point from January 2025 to January 2026 and after briefly hovering below the 6% mark as late as mid-April, rates here have dramatically reversed course. The average rate on a 30-year term on May 21, for example, was 6.62% compared to the 5.99% rate it sat out the month before. And there's been little improvement in June, especially after the latest inflation reading showed a surge to the highest level since 2023, essentially wiping out the chances of a Federal Reserve rate cut for the foreseeable future. Now, interest rate hikes look possible, especially if the combination of strong employment and higher inflation continues.
Against this backdrop, all eyes turn toward the central bank as it meets for the first time since April on June 16 and June 17. Market conditions since the Fed last met have been especially turbulent, and there will be much to discuss and analyze. For borrowers looking to purchase a home or refinance their current one in this climate, however, there are also some strategic moves worth considering now, before the Fed's June meeting even commences. Below, we'll examine three specific ones that may be worth making currently.
Start by seeing which mortgage interest rate you currently qualify for here.
3 mortgage moves to make before the June Fed meeting
The June Fed meeting is just days away and, with it, the potential to impact the mortgage interest rate climate. Borrowers should use this time strategically, then, by making the final three moves right now:
Re-evaluate your budget
When was the last time you took a close look at your purchase or refinance budget? Even if it was just a month or two ago, chances are high that it now looks different, as the rate climate has markedly changed. What you may have been able to afford previously may no longer be true.
At the same time, you may be able to maintain your budget, only now via the addition of mortgage interest rate points or via an adjustable-rate mortgage instead. Start by sitting down with a pen and paper, then, to see how your budget has changed and, if it's noticeably different, consider the alternative ways in which you may still be able to secure a mortgage rate under 6% this June.
Review your current mortgage options online today.
Shop around for rates and lenders
Shopping for mortgage interest rates and lenders to locate the best deals is an integral part of the homebuying or refinancing process in any economy, but it's an especially critical component right now. Different lenders will have different responses to today's surging inflation rate, while preemptive adjustments before the Fed's June meeting also have the potential to drive rates upward or downward.
In other words, expect pronounced variability among lenders right now, as each interprets market conditions in their own way. By shopping around, however, you'll have a better chance at finding the lowest rate versus just agreeing to the first offer you receive.
Consider a mortgage rate lock
A mortgage interest rate lock right now makes a lot of sense. While the chances of a rate cut are virtually nonexistent at the Fed's June meeting, rates could still rise once it's over, depending on the comments made by officials. Remember, too, that lenders aren't dictated by the Fed; they only use it as a guide.
So if they interpret comments as indicative of higher rates for longer or, worse, a potential rate hike this year, they can and will raise their rates to borrowers to compensate for that. A mortgage rate lock now, however, protects borrowers from that increasingly realistic scenario. And, if rates were to drop before closing, most lenders will allow borrowers to float their rate down at that point. In the interim, however, they'll secure some much-needed rate protection.
The bottom line
Borrowers need to be judicious in their mortgage rate approach as the June Fed meeting looms. By re-evaluating their budget, diligently shopping around for rates and lenders, and exploring the pros and cons of a mortgage rate lock, they can improve their chances of borrowing success. While today's interest rate climate may not be ideal, borrowers can still potentially find an offer that works for them, as long as they're willing to put in the time and effort now, before the June Fed meeting possibly impacts the landscape all over again.
Edited by Angelica Leicht
