April 1, 2023

Mortgage rates have risen over the past few weeks. But rates are still below where they were in June when the 30-year fixed rate was close to 6%.

Mortgage rates typically decline from their early summer peaks, but fluctuate widely along the way. Now, rates are rising again, although they are unlikely to return to their June peaks.

Interest rates have been fluctuating as people await Fed Chairman Jerome Powell’s speech on inflation. On Friday, Powell said the Fed does not intend to slow down the pace of cooling inflation — which could mean the central bank will raise the federal funds rate in September.

Mortgage rates don’t directly synchronize with the federal funds rate, but they are often indirectly affected by Fed actions and how investors expect those actions to affect the economy.

Mortgage Rates Today

Mortgage Refinance Rates Today

Mortgage calculator

Use our free mortgage calculator to see how today’s mortgage rates will affect your monthly and long-term payments.

Mortgage calculator

Your estimated monthly payment

  • pay 25% A higher down payment will save you $8,916.08 Interest expense
  • lower interest rates 1% will save you $51,562.03
  • pay extra $500 The loan term will be reduced every month 146 moon

By plugging in different terms and interest rates, you’ll see how your monthly payments might change.

Will Mortgage Rates Rise?

Mortgage rates have recovered from historic lows in the second half of 2021 and have risen sharply so far in 2022. Interest rates have been relatively volatile recently.

Over the past 12 months, the consumer price index has risen 8.5%. The Fed has been struggling to control inflation and plans to raise the federal funds target rate three more times in March, May, June and July this year.

Although not directly related to the federal funds rate, mortgage rates are sometimes pushed higher by the Federal Reserve raising interest rates and investors’ expectations about how those increases will affect the economy.

Inflation remains high but has begun to slow, which bodes well for mortgage rates and the broader economy.

What does high interest rates mean for the housing market?

When mortgage rates rise, homebuyers have less purchasing power because more of their expected housing budget has to go toward paying interest. If interest rates are high enough, buyers can exit the market entirely, cooling demand and putting downward pressure on house price growth.

However, that doesn’t mean house prices will fall – in fact, house prices are expected to rise more this year, just at a slower pace than we’ve seen over the past few years.

Even with fewer buyers in the market, those who can afford to buy will still compete with historically low inventory. When there are more buyers than available homes, home prices rise. So while things may ease a bit due to high interest rates, we are unlikely to see a significant price drop.

What is a good mortgage rate?

It can be hard to know if a lender is offering you a good rate, which is why it’s so important to get pre-approval from multiple mortgage lenders and compare each offer. Apply for pre-approval with at least two or three lenders.

Your rates aren’t the only thing that matters. Be sure to compare your monthly costs as well as your upfront costs, including any lender fees.

Although mortgage rates are heavily influenced by economic factors beyond your control, there are a few things you can do to ensure you get a good rate:

  • Consider fixed rates versus adjustable rates. You can get a lower introductory rate with an adjustable-rate mortgage, which can be great if you plan to move before the introductory period ends. However, if you’re buying a permanent home, a fixed rate might be better because you don’t risk interest rates going up later. Check out the rates your lender offers and weigh your options.
  • Take a look at your financial situation. The stronger your financial situation, the lower your mortgage rate should be. If necessary, look for ways to improve your credit score or lower your debt-to-income ratio. Saving for a higher down payment also helps.
  • Choose the right lender. Each lender charges a different mortgage rate. Choosing the right one for your financial situation will help you get a good interest rate.

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