For your consideration: Our observations regarding What's holding back the housing market?

For your consideration: Our observations regarding What's holding back the housing market?

Today's Mortgage Rates - 04/23/2024

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Mortgage Rates Rise Considerably

As expected, mortgage rates rose appreciably this week, as the prospects for a near-term cut in rates by the Federal Reserve have faded.

As reported by Freddie Mac today, the average offered interest rate for a conforming 30-year fixed-rate mortgage increased by twenty-two basis points (0.22%) to 7.10%, the highest this average have been in nearly five months.

Average offered rates for fifteen-year fixed-rate mortgages fared no better, posting a rise of 23 basis points (0.23%), pushing back up to 6.39%, the highest mark for this loan term since the week of November 30, 2023.

Relative to a long-term fixed-rate mortgage, the offered rate for the most popular ARM was somewhat more attractive again this week. The Mortgage Bankers Association reported that the average offered rate for first five years of a 5/1 hybrid ARM increased by only eleven basis points (0.11%) in their latest survey week, lifting the average rate to 6.52%. With fixed-rate mortgages elevated again and a half-percentage point or more of interest rate differential available, some homebuyers may more strongly consider taking an ARM to achieve at least some payment savings in the early years of their loan.

ARMs are not a set-it-and-forget-it loan product, though. If you're interested in learning the advantages (and drawbacks) of ARMs, you should read HSH's comprehensive Guide to Adjustable Rate Mortgages.

With the recent inflation news still less than stellar and the economy continuing to perk along at a solid clip, investors have become increasingly convinced that the hoped-for June cut in rates is no longer the most likely case for monetary policy.

The change in direction for price pressures from retreat to advance has even seemed to catch the Federal Reserve a bit off-guard. As recently as just a few weeks ago, the Fed's official outlook was that inflation would continue to settle on a "bumpy" path, but that the prospects for as many as three cuts in rates this year remained in place.

This week, Fed Chair Powell spoke at a forum in Washington and offered "The recent data have clearly not given us greater confidence [regarding inflation returning to the Fed's 2% goal] and instead indicate that it's likely to take longer than expected to achieve that confidence." Without such confidence that inflation is likely to continue to trend downward, the Fed will not be cutting rates very soon. We'll hopefully learn a little more when the Fed meets again at the end of the month, but it is likely that at least two or three consecutive inflation readings below expectations will be needed before monetary policy will be changed.

At present, futures-market investors place just a 15% probability that the first cut in rates will come in June, and only about a 40% chance that July is "in play" at this point.

Unfortunately for potential home buyers, mortgage rates are back up past the 7% mark again. While there's little to like about the present position of rates, it does appear as though the bulk of the rise is over for now, and there is a reasonable chance that they hold around present levels over the next few days.

Each week in HSH's MarketTrends newsletter, we track and discuss economic conditions that affect mortgage rates and their impact on housing markets and consumers. Read the most recent edition of MarketTrends or subscribe for email delivery.

Week 30-year-Fixed 15-year-Fixed
04/18 7.100% 6.390%
04/11 6.880% 6.160%
04/04 6.820% 6.060%
03/28 6.790% 6.110%
03/21 6.870% 6.210%
03/14 6.740% 6.160%
03/07 6.880% 6.220%
02/29 6.940% 6.260%
02/22 6.900% 6.290%
02/15 6.770% 6.120%
02/08 6.640% 5.900%
02/01 6.630% 5.940%

Mortgage Choices at a Glance

Loan type/terms Fixed 30 years Fixed 15 years/
20 Years
Hybrid ARM Traditional ARM Balloon Mortgage
Rate changes
  • Never; Fully fixed for entire term
  • Never; Fully fixed for entire term
  • Usually after fixed period of 3, 5, 7 or 10 years
  • After that, annual change typical
  • Fully variable
  • Typically changing at one-year intervals
  • Some have shorter change intervals
  • Never; Fully fixed for entire term
  • Low, stable payment
  • Usually easiest qualification
  • Stable payments
  • Builds equity faster
  • Lower total interest costs than 30-year term
  • Lower rates than fully fixed-rate mortgage
  • Can sometimes borrow larger loan amount for same income
  • Can have lowest interest rates
  • Qualification may not depend upon today's interest rate
  • Often has lower interest rate/monthly payment over balloon period than fixed rate
  • Similar to hybrid ARM
  • Can have highest total interest cost over time
  • User may "buy" more rate stability than actually needed, increasing cost
  • Requires higher income to qualify
  • Less affordable monthly payment
  • Funds commited to payment cannot be used elsewhere
  • Stable payment for a number of years, then unpredictable
  • Rates can jump by as much as 6 percentage points at first adjustment
  • Payments fluctuate at each rate change
  • Unpredictable, rates can change as much as 2 percentage points at each adjustment
  • Loan fully due and payable when balloon period ends
  • Must be paid off or refinanced in unknown market conditions
Alternative strategy
  • Consider Hybrid ARM with appropriate fixed period
  • Consider 30-year term and prepaying loan to preserve cash-flow flexibility
  • Consider Fixed rate mortgage or longest possible fixed period, if loan hold period not known
  • Consider Hybrid ARM to ameliorate rate and payment risks for a given period
  • Consider Hybrid ARM to ensure continued loan availability
These may be useful for...
  • Purchasing a home
  • First-time homebuyers
  • Refinancing to improve cash flow/lower payment
  • Refinancing to lower total interest cost
  • Retiring mortgage more quickly
  • Building or rebuilding equity more quickly
  • Purchasing or refinancing when time horizon is seven years or shorter, and where borrower can handle increase in monthly payments
  • Purchasing or refinancing when interest rates are near top of cycle, and are likely to fall, or sale or refinance is anticipated within three years
  • Purchasing or refinancing when time horizon is three years or longer and home will be sold prior to end of balloon period
Consider if
  • Buying or refinancing a home and planning on owning for longer than 10 years
  • Buying second home
  • Refinancing to build equity
  • Paying off mortgage before life event (retirement, etc)
  • Buying a home and expect to move before fixed period ends, or know income will rise to offset payment risk, even in worst-case scenario
  • Buying or refinancing when income can handle frequent payment changes and worst-case scenario for rates over a four-year period
  • Buying a home and expect to move before balloon period ends, or have resources to pay off mortgage if refinance not available
When shopping, ask about
  • "Full cost" vs. "No cost" refinances, prepaying loan to shorten term if desired
  • If 20-year term makes payment too high, whether 25-year term is available
  • Interest rate caps, for first and subsequent adjustments, worst-case scenario
  • A history of the Index the loan is keyed off, margin and caps
  • Whether or not there is any built-in refinancing option when the balloon period ends
Useful tools & resources

Latest Mortgage Rate Analysis

HSH's longer-range outlook for mortgage rates, where we review our last forecast,discuss current market influences and provide our expectations for mortgage rates over the next nine weeks.

Mortgage Calculators

Mortgage rates and more

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