Mortgage And Refinance Rates, April 1

Today’s mortgage and refinance rates

Average mortgage rates inched lower yesterday, continuing this week’s run of good news. However, they were still higher yesterday evening than they had been seven days earlier — and much higher than two weeks earlier. So keep your Champagne on ice for now.

Especially as mortgage rates look likely to rise, perhaps appreciably. That likely increase is largely down to a good jobs report this morning. But, in these volatile times, nothing’s certain.

Current mortgage and refinance rates

Should you lock a mortgage rate today?

Don’t lock on a day when mortgage rates look set to fall. My recommendations (below) are intended to give longer-term suggestions about the overall direction of those rates. So, they don’t change daily to reflect fleeting sentiments in volatile markets.

I’ve long said that even strongly rising rate trends invariably have days and longer periods of falls. Is that what we’ve been seeing this week: just a blip in a continuing upward curve? Or might we be witnessing the start of a new downward trend? Nobody can be sure at this point. But I think it’s probably just a blip.

To me, the underlying drivers of higher mortgage rates remain strong (see below). And I’d be surprised if this week’s welcome falls continued for long or moved those rates significantly lower.

So, my personal rate lock recommendations for the longer term remain:

• LOCK if closing in 7 days
• LOCK if closing in 15 days
• LOCK if closing in 30 days
• LOCK if closing in 45 days
• LOCK if closing in 60 days

>Related: 7 Tips to get the best refinance rate

Market data affecting today’s mortgage rates

Here’s a snapshot of the state of play this morning at about 9:50 a.m. (ET). The data, compared with roughly the same time yesterday, were:

• The yield on 10-year Treasury notes climbed to 2.45% from 2.33%. (Very bad for mortgage rates.) More than any other market, mortgage rates normally tend to follow these particular Treasury bond yields
• Major stock indexes were rising soon after opening. (Bad for mortgage rates.) When investors are buying shares they’re often selling bonds, which pushes prices of those down and increases yields and mortgage rates. The opposite may happen when indexes are lower. But this is an imperfect relationship
• Oil prices fell to $100.06 from $103.65 a barrel. (Good for mortgage rates*.) Energy prices play a large role in creating inflation and also point to future economic activity
• Gold prices decreased to $1,935 from $1,944 an ounce. (Neutral for mortgage rates*.) In general, it is better for rates when gold rises, and worse when gold falls. Gold tends to rise when investors worry about the economy. And worried investors tend to push rates lower
• CNN Business Fear & Greed index — edged lower to 51 from 54 out of 100. (Good for mortgage rates.) “Greedy” investors push bond prices down (and interest rates up) as they leave the bond market and move into stocks, while “fearful” investors do the opposite. So lower readings are better than higher ones

*A movement of less than $20 on gold prices or 40 cents on oil ones is a change of 1% or less. So we only count meaningful differences as good or bad for mortgage rates.

Caveats about markets and rates

Before the pandemic and the Federal Reserve’s interventions in the mortgage market, you could look at the above figures and make a pretty good guess about what would happen to mortgage rates that day. But that’s no longer the case. We still make daily calls. And are usually right. But our record for accuracy won’t achieve its former high levels until things settle down.

So use markets only as a rough guide. Because they have to be exceptionally strong or weak to rely on them. But, with that caveat, mortgage rates today might rise. However, be aware that “intraday swings” (when rates change direction during the day) are a common feature right now.

Important notes on today’s mortgage rates

Here are some things you need to know:

1. Typically, mortgage rates go up when the economy’s doing well and down when it’s in trouble. But there are exceptions. Read ‘How mortgage rates are determined and why you should care’
2. Only “top-tier” borrowers (with stellar credit scores, big down payments and very healthy finances) get the ultralow mortgage rates you’ll see advertised
3. Lenders vary. Yours may or may not follow the crowd when it comes to daily rate movements — though they all usually follow the wider trend over time
4. When daily rate changes are small, some lenders will adjust closing costs and leave their rate cards the same
5. Refinance rates are typically close to those for purchases.

A lot is going on at the moment. And nobody can claim to know with certainty what will happen to mortgage rates in the coming hours, days, weeks or months.

Are mortgage and refinance rates rising or falling?

Mortgage rates have been falling so far this week. But you have to see that within the context of a strong upward trend that started last September.

That upward trend has this year had two main drivers:

1. Worryingly high inflation — Yesterday’s personal consumption expenditures (PCE) price index showed consumer prices rising 6.4% year over year, a new 40-year peak
2. The Federal Reserve’s counter-inflationary measures — Those should make all borrowing significantly more expensive through into 2023 and possibly beyond

Obviously, those are closely related. And neither has gone away. Indeed, Russia’s war in Ukraine is likely to make them more potent as a result of higher prices for several commodities in global markets.

So I don’t see grounds for optimism over the future direction of mortgage rates. To my mind, the best-case scenario is that we may have seen the last of the very sharp rises and that there will be more moderate increases in the future.

However, the last time I wrote about “very sharp increases” being in the rearview mirror, there was just such a rise the very next day. In some ways, it’s much easier to predict the long term than the short.

Today

We got first sight of the official employment situation report for March this morning. This hugely influential report provides data about new jobs (“nonfarm payrolls”), the unemployment rate and average hourly earnings.

The Wall Street Journal (paywall) reported today’s numbers thus:

U.S. job growth continued at a robust pace in March while the unemployment rate fell, as the Covid-19 pandemic’s grip on the labor market recedes and more workers return to the labor force.

It often takes markets a while to digest these key reports. So we can’t be sure that early reactions will endure. Normally, good figures would push mortgage rates higher while bad ones would drag them lower. But these aren’t normal times and we’ll have to wait and see what today’s figures do to rates.

Read the weekend edition of this daily article for more background.

Recent trends

Over much of 2020, the overall trend for mortgage rates was clearly downward. And a new, weekly all-time low was set on 16 occasions that year, according to Freddie Mac.

The most recent weekly record low occurred on Jan. 7, 2021, when it stood at 2.65% for 30-year fixed-rate mortgages.

Since then, the picture has been mixed with extended periods of rises and falls. Unfortunately, the rises have grown more pronounced since last September.

Freddie’s Mar. 31 report puts that weekly average for 30-year, fixed-rate mortgages at 4.67% (with 0.8 fees and points), up from the previous week’s 4.42%. That most recent figure won’t have included most of this week’s falls.

Note that Freddie expects you to buy discount points (“with 0.8 fees and points”) on closing that earn you a lower rate. If you don’t do that, your rate would be closer to the ones we and others quote.

Expert mortgage rate forecasts

Looking further ahead, Fannie Mae, Freddie Mac and the Mortgage Bankers Association (MBA) each has a team of economists dedicated to monitoring and forecasting what will happen to the economy, the housing sector and mortgage rates.

And here are their current rate forecasts for the four quarters of 2022 (Q1/22, Q2/22, Q3/22, Q4/22).

The numbers in the table below are for 30-year, fixed-rate mortgages. Fannie’s were published on Mar. 17 and the MBA’s on Mar. 22. But Freddie now publishes these forecasts every quarter, most recently on Jan. 21. So its figures are already looking very stale.

Forecaster	Q1/22	Q2/22	Q3/22	Q4/22
Fannie Mae	3.7%	3.8%	3.8%	3.9%
Freddie Mac	3.5%	3.6%	3.7%	3.7%
MBA	3.8%	4.2%	4.4%	4.5%

Of course, given so many unknowables, the whole current crop of forecasts might be even more speculative than usual. I’m afraid I’m less optimistic than any of them.

Find your lowest rate today

You should comparison shop widely, no matter what sort of mortgage you want. As federal regulator the Consumer Financial Protection Bureau says:

“Shopping around for your mortgage has the potential to lead to real savings. It may not sound like much, but saving even a quarter of a point in interest on your mortgage saves you thousands of dollars over the life of your loan.”

Mortgage rate methodology

The Mortgage Reports receives rates based on selected criteria from multiple lending partners each day. We arrive at an average rate and APR for each loan type to display in our chart. Because we average an array of rates, it gives you a better idea of what you might find in the marketplace. Furthermore, we average rates for the same loan types. For example, FHA fixed with FHA fixed. The end result is a good snapshot of daily rates and how they change over time.