Mortgage and refinance rates today, Apr. 1, and rate forecast for next week

Today’s mortgage and refinance rates

Average mortgage rates fell modestly yesterday for the second day. But rises earlier in the week meant they closed higher last night than they were seven days earlier. The good news is that they ended March significantly lower than they started it.

My prediction for last week was wrong, which illustrates how difficult it is to make forecasts when so much is unpredictable. I’m hoping mortgage rates might hold steady or fall just a little next week.

That’s certainly my expectation for the longer term. But the chances of my being wrong over any seven-day period are high. Certainly, good employment figures next Friday could easily push mortgage rates higher.

Current mortgage and refinance rates

Should you lock a mortgage rate today?

My personal view is that mortgage rates are more likely to fall than rise over the coming months. Read on for my reasons.

But forecasting shorter-term ups and downs is much more difficult. And I’m changing my rate lock recommendations, below, to reflect that.

But feel free (as if you don’t already) to ignore my recommendations depending on your tolerance for risk. My suggestions reflect what I would do in your shoes and I’m cautious with money.

In any event, my personal rate lock recommendations remain:

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

However, with so much uncertainty at the moment, your instincts could easily turn out to be as good as mine — or better. So let your gut and your own tolerance for risk help guide you.

What’s moving current mortgage rates

The coming months

The Federal Reserve and many economists believe banks have been spooked by recent crises in the financial sector. And they’re expecting those banks to make it significantly more difficult for consumers and businesses to borrow.

That lack of financing should reduce demand and therefore rein in economic growth. Indeed, many are now expecting a recession within months. For us, there are typically two main advantages to a recession: lower inflation and lower mortgage rates.

Normally, markets pride themselves on forecasting economic trends and pricing them in way before they arrive. But they don’t yet seem to be pricing in an imminent recession.

And that surprises me. Because, even if economists are proved wrong over banks causing a recession, I reckon the Fed’s likely to trigger one.

The Fed’s desperate to tame inflation. And it may well decide that, if banks won’t deliver an inflation-killing recession, it will. It can easily do that by resuming sharp rate hikes.

The shorter term

I’m optimistic (from the point of view of mortgage rates) that scenario will play out over the next few months, absent some massive event emerging from left field. However, things are less predictable over the next several weeks.

I’m hoping markets will begin to recognize the likelihood of a recession soon. But they can be stubborn and unpredictable critters.

Sometimes they can ignore danger until it’s actively nibbling on their tender areas. Other times, they can bolt over nothing. We’ll have to wait to see how they handle this one.

While we’re waiting, expect mortgage rates to drift up and down depending on what economic reports are saying. For example, next Friday brings the March jobs report.

Next Friday’s jobs report

The official employment situation report (“jobs report”) for March lands next Friday morning. Overnight, analysts were expecting to see 235,000 new jobs created that month, according to MarketWatch.

If the report contains an appreciably higher number, mortgage rates might rise. But if it shows an appreciably smaller one, those rates might fall.

If the analysts got their forecast roughly right, mortgage rates might barely budge on the news. But they have a pretty terrible recent record for forecasting having got January and February’s jobs reports horribly wrong.

Economic reports next week

So, next Friday’s jobs report is likely to be the big event next week. However, top Fed officials will be out in force making speeches and they too might sway markets.

We show important economic reports in bold in the following list. And I doubt others will move mortgage rates far unless they reveal shockingly good or bad data.

• Monday — March purchasing managers’ indexes (PMIs) for the manufacturing sector from S&P and the Institute for Supply Management (ISM)
• Tuesday — February job openings and labor turnover survey (JOLTS). Plus that month’s factory orders
• Wednesday — March ADP employment survey (private sector only). Plus PMIs for the services sector from S&P and the ISM
• Thursday — Initial jobless claims for the week ending April 1
• Friday — March employment situation report, including new jobs, unemployment rate and average hourly earnings

Friday’s jobs report is by far the most important report next week.

Time to make a move? Let us find the right mortgage for you

Mortgage interest rates forecast for next week

Once again, I’m hoping mortgage rates might drift gently lower next week. But I was wrong this week and may well be next.

It’s much harder to make predictions over seven days than over one day or several months. So, don’t rely on these weekly forecasts.

How your mortgage interest rate is determined

Mortgage and refinance rates are generally determined by prices in a secondary market (similar to the stock or bond markets) where mortgage-backed securities are traded.

And that’s highly dependent on the economy. So mortgage rates tend to be high when things are going well and low when the economy’s in trouble. But inflation rates can undermine those tendencies.

Your part

But you play a big part in determining your own mortgage rate in five ways. And you can affect it significantly by:

1. Shopping around for your best mortgage rate — They vary widely from lender to lender
2. Boosting your credit score — Even a small bump can make a big difference to your rate and payments
3. Saving the biggest down payment you can — Lenders like you to have real skin in this game
4. Keeping your other borrowing modest — The lower your other monthly commitments, the bigger the mortgage you can afford
5. Choosing your mortgage carefully — Are you better off with a conventional, conforming, FHA, VA, USDA, jumbo or another loan?

Time spent getting these ducks in a row can see you winning lower rates.

Remember, they’re not just a mortgage rate

Be sure to count all your forthcoming homeownership costs when you’re working out how big a mortgage you can afford. So, focus on your “PITI.” That’s your Principal (pays down the amount you borrowed), Interest (the price of borrowing), (property) Taxes, and (homeowners) Insurance. Our mortgage calculator can help with these.

Depending on your type of mortgage and the size of your down payment, you may have to pay mortgage insurance, too. And that can easily run into three figures every month.

But there are other potential costs. So, you’ll have to pay homeowners association dues if you choose to live somewhere with an HOA. And, wherever you live, you should expect repairs and maintenance costs. There’s no landlord to call when things go wrong!

Finally, you’ll find it hard to forget closing costs. You can see those reflected in the annual percentage rate (APR) that lenders will quote you. Because that effectively spreads them out over your loan’s term, making that rate higher than your straight mortgage rate.

But you may be able to get help with those closing costs and your down payment, especially if you’re a first-time buyer. Read:

Down payment assistance programs in every state for 2023

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 result is a good snapshot of daily rates and how they change over time.