Mortgage and refinance rates today, Apr. 8, and rate forecast for next week

Today’s mortgage and refinance rates

Surprisingly, average mortgage rates climbed appreciably yesterday. Still, they fell over the entire week so the overall news is good.

I’m going to duck making a prediction for what will happen to mortgage rates over the next seven days. Everything pivots on next Wednesday’s inflation report (details below). And that’s unknowable at this point.

Current mortgage and refinance rates

Should you lock a mortgage rate today?

I’m still optimistic that mortgage rates will fall over the coming months, perhaps through the end of the year and beyond. That’s because I’m expecting the economy to continue to slow, probably to the point of recession.

However, it’s much easier to look months ahead than weeks ahead. Short-term economic and other news stories can easily lead to brief breaks from the longer-term trend.

That’s why my personal rate lock recommendations remain:

• LOCK if closing in 7 days
• LOCK if closing in 15 days
• FLOAT if closing in 30 days
• FLOAT if closing in 45 days
• FLOAT if closing in 60 days

However, with so much uncertainty at the moment, your instincts could easily turn out to be as good as mine — or better. So let your gut and your own tolerance for risk help guide you.

What’s moving current mortgage rates

Yesterday

I sometimes wonder if I could claim my rapidly thinning hair as an industrial injury. I do, after all, spend a lot of my working time scratching my head over markets’ seemingly perverse antics.

Take yesterday as an example. The jobs report (formally, the “employment situation report”) for March should have been good for mortgage rates.

The number of employees private companies added to payrolls that month was 236,000. That was very slightly fewer than economists were forecasting. And it was very considerably fewer than the 311,000 in February and less than half January’s 517,000.

Market perversity

Normally, such clear evidence of a tightening labor market and a slowing economy would send mortgage rates downward. And that’s especially true when a report’s secondary data support that view, as happened yesterday.

Only the unemployment rate moved in a mortgage-rate-unfriendly way. And markets routinely ignore that.

Growth in average hourly earnings slowed and the average workweek for all employees on private nonfarm payrolls edged down.

Yesterday’s Wall Street Journal (paywall) summed it up, including its likely effect on the thinking of the Federal Reserve: “Those slower growth rates should signal to the Fed ‘that the kindling for future inflation is dwindling,’ said Omair Sharif of Inflation Insights LLC, an advisory firm. ‘This is undoubtedly going to be looked at as good news by the Fed, as they continue to worry that higher labor costs are the main’ driver of non-housing, service-sector inflation.”

And yet mortgage rates rose when they’d normally have fallen. And I’ve lost a bunch of precious follicles.

Next Wednesday’s inflation report

There may have been reasons for the odd reaction to the jobs report. Bond markets were open for only a few hours because it was published on Good Friday. And perhaps some of the more seasoned investors had taken the morning off to fully enjoy the Easter weekend.

Luckily, such strangeness isn’t all that common. Markets usually respond to economic reports as you’d expect.

So, let’s look at next Wednesday’s inflation report in that light. It’s called the consumer price index (CPI). And it’s one of the two most important economic reports each month.

If it shows price rises slowing in March more than expected, that should pull mortgage rates lower. But, if it shows price momentum holding or building, mortgage rates are likely to rise.

Here are February’s actual CPI figures alongside the current consensus forecast among economists for March. Month-over-month (M/M) numbers show changes in March while year-over-year (Y/Y) ones show the change over the previous 12 months. Core data are the ordinary CPI figures with volatile food and energy prices stripped out.

Other important reports next week

There are two other big economic reports next week that are especially likely to move mortgage rates.

The first is the producer price index (PPI), which measures inflation earlier in the supply chain than the CPI. At one point, they were called factory-gate prices.

What this report shows next Thursday is likely to turn up in later CPI figures so investors take it seriously. And economists are expecting the year-over-year number to fall to 3.1% in March from 4.6% in February. That could be good for mortgage rates if they’re right.

The week’s other crucial report lands on Friday and shows retail sales for March. Again, economists are expecting a fall (to -0.5% from February’s -0.4%) and mortgage rates might fall if they’re correct.

Economic reports next week

I covered next week’s critical reports in the last section. They’re shown in bold in the following list. And I doubt others will move mortgage rates far unless they reveal shockingly good or bad data.

Watch out, too, for top Federal Reserve officials’ speaking engagements, at least one of which is scheduled on most days next week. Markets are again concerned about the size of the Fed’s next rate hike on May 3. And they’ll have an ear open for hints.

• Tuesday — March independent businesses’ optimism index
• Wednesday — March consumer price index. Plus publication of the minutes of the last meeting of the Fed’s rate-setting committee
• Thursday — March producer price index. Plus initial jobless claims for the week ending April 8
• Friday — March retail sales. Plus that month’s industrial production and capacity utilization. And April’s consumer sentiment index

Watch out for Wednesday’s CPI!

Time to make a move? Let us find the right mortgage for you

Mortgage interest rates forecast for next week

Apologies for another week without a mortgage rates forecast. But Wednesday’s CPI report is unpredictable and could change everything.

Over the longer term, I’m still hopeful that mortgage rates could fall further.

How your mortgage interest rate is determined

Mortgage and refinance rates are generally determined by prices in a secondary market (similar to the stock or bond markets) where mortgage-backed securities are traded.

And that’s highly dependent on the economy. So mortgage rates tend to be high when things are going well and low when the economy’s in trouble. But inflation rates can undermine those tendencies.

Your part

But you play a big part in determining your own mortgage rate in five ways. And you can affect it significantly by:

1. Shopping around for your best mortgage rate — They vary widely from lender to lender
2. Boosting your credit score — Even a small bump can make a big difference to your rate and payments
3. Saving the biggest down payment you can — Lenders like you to have real skin in this game
4. Keeping your other borrowing modest — The lower your other monthly commitments, the bigger the mortgage you can afford
5. Choosing your mortgage carefully — Are you better off with a conventional, conforming, FHA, VA, USDA, jumbo or another loan?

Time spent getting these ducks in a row can see you winning lower rates.

Remember, they’re not just a mortgage rate

Be sure to count all your forthcoming homeownership costs when you’re working out how big a mortgage you can afford. So, focus on your “PITI.” That’s your Principal (pays down the amount you borrowed), Interest (the price of borrowing), (property) Taxes, and (homeowners) Insurance. Our mortgage calculator can help with these.

Depending on your type of mortgage and the size of your down payment, you may have to pay mortgage insurance, too. And that can easily run into three figures every month.

But there are other potential costs. So, you’ll have to pay homeowners association dues if you choose to live somewhere with an HOA. And, wherever you live, you should expect repairs and maintenance costs. There’s no landlord to call when things go wrong!

Finally, you’ll find it hard to forget closing costs. You can see those reflected in the annual percentage rate (APR) that lenders will quote you. Because that effectively spreads them out over your loan’s term, making that rate higher than your straight mortgage rate.

But you may be able to get help with those closing costs and your down payment, especially if you’re a first-time buyer. Read:

Down payment assistance programs in every state for 2023

Mortgage rate methodology

The Mortgage Reports receives rates based on selected criteria from multiple lending partners each day. We arrive at an average rate and APR for each loan type to display in our chart. Because we average an array of rates, it gives you a better idea of what you might find in the marketplace. Furthermore, we average rates for the same loan types. For example, FHA fixed with FHA fixed. The result is a good snapshot of daily rates and how they change over time.