Mortgage And Refinance Rates, April 5

Today’s mortgage and refinance rates

Average mortgage rates fell modestly yesterday. And they’re now appreciably lower than they were on Mar. 25, which was when we saw the last giant rise. But they remain much higher than they were before that day.

Judging from early movements in markets this morning, mortgage rates today might rise, possibly sharply. That might change as the hours pass. But it would take quite a turnaround for those rates to fall.

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 still think that the current run of falling mortgage rates won’t last long. And I suspect those rates have further to climb. Please read below for my reasons.

But mine is only one voice. And I might easily be proved wrong by events. Whether you take any notice of my advice will probably be down to your own appetite for risk. But, if you choose to gamble on rates falling further, be aware of the stakes and odds.

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 rose to 2.47% from 2.42%. (Bad for mortgage rates.) More than any other market, mortgage rates normally tend to follow these particular Treasury bond yields
• Major stock indexes were mostly lower soon after opening. (Good 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 rose to $104.34 from $103.39 a barrel. (Bad for mortgage rates*.) Energy prices play a large role in creating inflation and also point to future economic activity
• Gold prices increased to $1,946 from $1,932 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 — climbed to 54 from 50 out of 100. (Bad 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?

Yesterday, JPMorgan Chase CEO Jamie Dimon published his annual letter to shareholders. CNN Business describes Mr. Dimon as “one of the world’s most influential business leaders.” And his views certainly carry a lot of sway within markets.

One part of Mr. Dimon’s letter was especially relevant to future mortgage rates. He wrote:

I do not envy the Fed for what it must do next: The stronger the recovery, the higher the rates that follow (I believe that this could be significantly higher than the markets expect) and the stronger the quantitative tightening (QT). If the Fed gets it just right, we can have years of growth, and inflation will eventually start to recede. In any event, this process will cause lots of consternation and very volatile markets. The Fed should not worry about volatile markets unless they affect the actual economy. A strong economy trumps market volatility.

Regular readers will immediately understand what Mr. Dimon is saying. But others may stumble over the term “quantitative tightening” (QT). So let’s dig into that and then return to the thrust of his argument.

Quantitative easing (QE) is what the Federal Reserve did to stimulate the economy when the COVID-19 pandemic began to bite. It kept interest rates very low. And it bought industrial quantities of certain bonds, including mortgage-backed securities (MBSs). Those MBS purchases pushed mortgage rates to artificially low levels.

Quantitative tightening is the opposite of QE. The Fed plans to hike rates, probably sharply. And it says it will sell MBSs, promising to publish a detailed disposal plan on May 4. If QE dragged mortgage rates to new lows, you can imagine the likely impact of QT.

Implications for mortgage rates

It’s vanishingly unlikely that Jamie Dimon has ever heard of me or read a word I’ve written. But we agree in several ways.

He believes that interest rates could move “significantly higher than the markets expect.” And so do I. Of course, he’s talking about interest rates generally. But, if rises in those exceed expectations, it’s likely mortgage rates will, too.

And Mr. Dimon implies that QT will be tougher than many are expecting. That also corresponds with my view. Of course, almost everyone agrees that market volatility is unlikely to fade anytime soon.

Mortgage rates have been climbing at a near-record pace over the last couple of months because markets have been pricing in what they expect the Fed to do next. If Mr. Dimon’s right and those expectations are too low, those rates will continue to increase as an overall trend (not on every day) for some time to come.

Of course, Mr. Dimon may have got this all wrong. Nobody knows the future. But there’s a reason he’s “one of the world’s most influential business leaders.”

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.