Mortgage And Refinance Rates, April 7

Today’s mortgage and refinance rates

Average mortgage rates rose moderately yesterday. A sharper increase had looked likely earlier that day but sentiment changed during the afternoon. Still, they’re now perilously close to their highest level since 2018 and not far off the previous high in 2011.

It’s a very different story in markets this morning. And, so far it’s looking as if mortgage rates today might hold steady or barely move. But, as always, that could change later.

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.

There may be more falls ahead. But the overall upward trend remains strong. And, if I were you, I’d lock my rate earlier rather than later.

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 inched up to 2.64% from 2.63%. (Bad for mortgage rates.) More than any other market, mortgage rates normally tend to follow these particular Treasury bond yields
• Major stock indexes were 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 fell to $97.71 from $101.87 a barrel. (Good for mortgage rates*.) Energy prices play a large role in creating inflation and also point to future economic activity
• Gold prices held steady at $1,933 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 — was unchanged 48 out of 100. (Neutral 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 be unchanged or barely changed. 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’s Federal Reserve minutes were as bad for mortgage rates as many had expected. But no worse. And relief over that allowed those rates to fall back during the afternoon, though there was still a moderate rise over the whole day.

Those minutes provided some insights into the Fed’s thinking over reducing its $2.7 trillion pile of mortgage-backed securities. Those MBSs are mortgage bonds, and they largely determine mortgage rates.

The central bank bought them in order to drive those rates lower. So, selling them should push rates higher.

The Wall Street Journal (paywall) yesterday reported on the minutes:

The minutes showed officials discussed allowing up to $60 billion in Treasurys and $35 billion in mortgage bonds to mature every month. That would allow the portfolio to run off considerably faster this time than last decade, when it shrank by up to $50 billion every month.

In other words, the Fed was planning to allow $35-billion worth of MBSs to mature (reach their end) each month. Currently, it uses the money from those maturations to go out and buy new MBSs, keeping its stock constant. But that will soon stop, probably in May or June.

Although that’s not the same as actively selling current bonds (that may come later), it has a similar impact on mortgage rates. It pushes them higher.

Now, those minutes show Fed officials thinking aloud at their mid-March meeting. The final plan for disposing of assets is due to be published on May 4. And even that won’t be really final. The central bank’s been signaling its willingness to change future policy on the hoof (“agilely”) in response to changing economic circumstances.

But, for now, the outlook for mortgage rates remains grim.

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

Recent trends — updated today

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 Apr. 7 report puts that weekly average for 30-year, fixed-rate mortgages at 4.72% (with 0.8 fees and points), up from the previous week’s 4.67%. But most of that week’s sharp rises won’t be included in that Apr. 7 figure.

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.