Softening home prices... but home affordability shrank again? See the income needed to buy a home in the top 50 metro areas to find out what's going on.

Softening home prices... but home affordability shrank again? See the income needed to buy a home in the top 50 metro areas to find out what's going on.

Today's Mortgage Rates - 03/20/2023

Personalize the results below to get your best mortgage rate

Personalize your quotes and see mortgage rates just for you.
Displaying Today's Mortgage Rates for a $320,000 Refinance loan.
Your loan amount is greater than the value of the property, a condition known as being "underwater".
Sorry, no listings found currently for the selected values

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.

Week 30-year-Fixed 15-year-Fixed
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

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

Add to Homescreen?
Install this web app on your phone :tap and then Add to homescreen