Today's Mortgage Rates - 03/20/2023
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March madness has roiled financial markets of late, but it's not basketball that's got investors on the edge of their seats. Mortgage rates have moved lower as concerns about the solvency of banks have overwhelms fears of inflation, at least for the moment.
As reported by Freddie Mac today, the average offered interest rate for a conforming 30-year fixed-rate mortgage declined by 13 basis points (0.13%) to 6.60%, and indications are that rates are still softening. The decrease has erased a portion of the climb in rates since an early February low.
Conforming fifteen-year FRMs saw a smaller decrease, with the average offered rate for the most common shorter-term mortgage easing by 5 basis points (0.05%) and slipping back to 5.90%, about where it was two weeks ago.
Freddie Mac's legacy rate survey showed that the average initial fixed rate for a hybrid 5/1 ARM continued to move higher rising by 15 basis points (0.15%) to 6.15 percent for the week. The gap in rates between the 5-year ARM and 30-year FRM has narrowed appreciably, with a 45-basis point spread unlikely to attract too many potential homebuyers to ARMs at the moment.
Just a week ago, there was an increasing likelihood that the Fed would strongly consider raising short-term rates by as much as a half-percentage point at its upcoming monetary policy meeting. Despite a touch of loosening, labor markets remain very tight and inflation very much remains firm at a level above what the Fed wants to see. At the very least, a 25 basis point increase in rates was considered to be a slam dunk next week, but even this smaller move has been called into question in recent days.
Then came the failure of several banks: Silicon Valley Bank, Signature Bank and Silvergate Banks all broke in recent days. In attempts to soothe market and fearing a spreading contagion and runs on other banks, the Fed announced emergency backstops for depositors. This has worked to a degree, but riskier investments such as stocks have seen selloffs in recent days, and that money is being plowed into safer havens, such as Treasury bonds. The influential yield on the 10-year Treasury was at 4% as recently as last Wednesday; as we write this on Thursday afternoon, about 3.57%.
While that move is impressive, it's very important to remember that mortgages aren't Treasurys; that is, money may rush into the safe haven of Treasury bonds, but it's not as though investors are rushing to buy mortgages or mortgage bonds. As such, while the sharp decline in Treasury yields has some influence on where mortgage rates are and are going, it's by no means a lockstep, one-for-one relationship.
Futures markets place an 80% chance of a quarter-point increase in the federal funds rate next week. For our part, we'll be very interested to see what Fed members think about the paths for economic growth, inflation and unemployment; this will be revealed in the Summary of Economic Projections, and provide key insight into where short and long term interest rates may go this year and beyond.
As markets continue to try to finds clarity and equilibrium, expect volatility to continue. For the moment, that appears to be to the benefit of home buyers and homeowners looking to refinance as somewhat lower rates are in the market for now.
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.
Current mortgage rates
Week | 30-year-Fixed | 15-year-Fixed |
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03/16 | 6.600% | 5.900% |
03/09 | 6.730% | 5.950% |
03/02 | 6.650% | 5.890% |
02/23 | 6.500% | 5.760% |
02/16 | 6.320% | 5.510% |
02/09 | 6.120% | 5.250% |
02/02 | 6.090% | 5.140% |
01/26 | 6.130% | 5.170% |
01/19 | 6.150% | 5.280% |
01/12 | 6.330% | 5.520% |
01/05 | 6.480% | 5.730% |
12/29 | 6.420% | 5.680% |
Mortgage Choices at a Glance
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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.