Mortgage And Refinance Rates, April 28

Today’s mortgage and refinance rates

Average mortgage rates just inched higher yesterday. That was disappointing because it was the first rise of the week. But only a bit because the movement was so small.

So far this morning, markets are signaling that mortgage rates today might rise. But there’s even more volatility around than usual, following poor gross domestic product data this morning. So, there’s plenty of scope for things to change as the hours pass.

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.

Don’t read too much into this week’s friendly movements in mortgage rates. Of course, it might be the start of better times for those rates. But it’s at least as likely to be a blip in a continuing upward trend. We’ll have to wait and see.

In the meantime, 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 2.85% from 2.78%. (Bad for mortgage rates.) More than any other market, mortgage rates normally tend to follow these particular Treasury bond yields
• Major stock indexes were higher 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 climbed to $102.01 from $99.88 a barrel. (Bad for mortgage rates*.) Energy prices play a large role in creating inflation and also point to future economic activity
• Gold prices inched down to $1,890 from $1,892 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 — held steady 31 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 increase. 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?

Today and tomorrow

This morning brought gross domestic product figures for the first quarter of this year. Annualized growth had been 6.9% in the previous quarter. And economists polled by MarketWatch were expecting that to drop to 1.0% for the first three months of 2022.

In the event, this morning’s actual figures were way worse than expected. The US economy didn’t grow at all that quarter, instead contracting by 1.4%. Markets’ initial reaction could well see a rise in mortgage rates. But don’t be surprised if that changes (for better or worse) as investors digest the implications of the shock news.

Stand by for another hugely important report tomorrow. That’s the monthly personal consumption expenditures (PCE) price index.

Why’s it so important? Well, it’s the Fed’s favorite measure of inflation. And it’s the last inflation data the central bank will see before its crucial two-day meeting on May 3 and 4.

If tomorrow’s figures are bad, they could encourage the Fed to announce next Wednesday afternoon even tougher anti-inflation measures than planned. And that would likely push up mortgage rates.

The Fed can live with a recession

Yesterday, I wrote, ” … fear of a recession might exert downward pressure on mortgage rates. But the Fed is highly likely to push forward with its plans, which are intended to counter inflation. And those should exert upward pressure on those rates.”

Why would I think the Fed will go ahead with its anti-inflation plans even if a recession is looming? After all, the stimulus programs it’s beginning to unwind were introduced to stave off just such a recession.

Why? Because Fed Chair Jerome Powell broadly hinted that was the case. Back in March, Mr. Powell gave testimony before Congress.

And he was asked directly whether the Fed would do whatever it took to rein in inflation. “I hope that history will record that the answer to your question is yes,” he replied.

Powell and Volker

Mr. Powell that day also referred to one of his predecessors, Paul Volker, as “the greatest economic public servant of the era.” Mr. Volker was the person who, as Fed chair, brought an end to the rampant inflation of the 1970s and early ‘80s.

But that great achievement came at an enormous cost. The New York Times (paywall) described the process:

Mr. Volcker’s Fed rolled out policies that pushed a key short-term interest rate to nearly 20 percent and sent unemployment soaring to nearly 11 percent in 1981. Car dealers mailed the Fed keys from unsold vehicles, builders sent two-by-fours from unbuilt houses and farmers drove tractors around the Fed building in Washington in protest. But the approach worked, killing off the rapid price inflation that had festered throughout the 1970s.

Of course, inflation was far higher and more persistent when Mr. Volker took his job than it is now. And Mr. Powell, we hope, won’t need quite such extreme measures.

But if you’re hoping the Fed will lower interest rates or build its holdings of mortgage bonds to save Americans from the worst effects of a recession, you might be disappointed.

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. 28 report puts that same weekly average for 30-year, fixed-rate mortgages at 5.10% (with 0.8 fees and points), minutely down from the previous week’s 5.11%.

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 remaining three quarters of 2022 (Q2/22, Q3/22, Q4/22) and the first quarter of next year (Q1/23).

The numbers in the table below are for 30-year, fixed-rate mortgages. Fannie’s were published on Apr. 19, Freddie’s on Apr. 18, and the MBA’s on Apr. 13.

Forecaster	Q2/22	Q3/22	Q4/22	Q1/23
Fannie Mae	4.6%	4.5%	4.5%	4.5%
Freddie Mac	4.8%	4.8%	5.0%	5.0%
MBA	4.7%	4.8%	4.8%	4.8%

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.