Today's Mortgage Rates - 04/26/2024

No Respite From Rate Rise

Already elevated, mortgage rates legged higher again this week.

Freddie Mac reported today that the average offered interest rate for a conforming 30-year fixed-rate mortgage (FRM) increased by another seven basis points (0.07%) to 7.17%, the highest this average have been since just after Thanksgiving.

The average offered rates for a fifteen-year fixed-rate mortgage also trended higher this week, rising by five more basis points (0.05%) to 6.44% reaching a five-month high.

Relative to a long-term fixed-rate mortgage, the offered rate for the most popular ARM was somewhat less 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 twelve basis points (0.12%) in their latest survey week, lifting the average rate to 6.64%. With a $300,000 loan, the half-percentage-point gap between the 30-year FRM and 5/1 Hybrid ARM creates a payment that is $106.37 per month lower and would save a borrower $8,002.71 in interest cost over the first five years of the loan. That's not a huge difference, but given today's interest rate and home price climate, even small savings have value.

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.

Inflation pressures and concerns continue to drive the markets and push interest rates higher. Investors this week are awaiting Friday's update of Personal Consumption Expenditure (PCE) price indexes, as the so-called "core PCE" measure is what the Fed prefers to use to track inflation. Other indicators -- the Consumer and Producer Prices Indexes, import and export costs and more -- have all pointed to a firming of inflation during the first three months of the year. In turn, this has significantly changed the outlook for rate cuts by the Fed this year,

We won't need to wait very long to get an update on what the Fed thinks about the recent trend for inflation, as the next meeting of the rate-setting Federal Open Market Committee comes next week on Tuesday and Wednesday. Although no updated Summary of Economic Projections from Fed members is due, the meeting-closing statement and post-meeting press conference with Fed Chair Jerome Powell will likely provide plenty of insight.

Influential bond yields and mortgage rates still seem in a modest upward trend as we write this, but it doesn't feel all that significant. As such, we expect just slightly higher mortgage rates in the market 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.