Mortgage rates today, Apr. 6, and rate forecast for next week

Today’s mortgage rates

Average mortgage rates just inched higher yesterday. Talk about dodging a bullet! That day’s jobs report would normally have sent them much higher. Read on for what might have averted a bigger rise. Anyway, mortgage rates ended this week appreciably higher than they started it.

Once again, I find that mortgage rates next week are wholly unpredictable. We’re due a series of highly important inflation reports next week, most notably the consumer price index (CPI). And they could push those rates either way.

Current mortgage and refinance rates

Should you lock a mortgage rate today?

This week, Federal Reserve Chair Jerome Powell hinted that he still expected to make three cuts to general interest rates later this year. But strong economic data, such as this week’s jobs report, may make it hard for Mr. Powell to deliver. And mortgage rates are unlikely to fall consistently until Fed cuts start, perhaps in the summer or fall.

So, my personal rate lock recommendations remain:

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

Yesterday’s jobs report should have pushed mortgage sharply higher. So, why didn’t it?

Well, there are a couple of theories doing the rounds. The first was proposed by The Wall Street Journal (paywall): " Jobs grew at a brisk pace in March, but wage growth was contained, confirming a belief among economists that the U.S. can continue to expand employment without fanning inflation.”

So, investors are hoping that the Fed will go ahead with its planned 2024 cuts to general interest rates despite the economy being robust. The only reason it began hiking those rates was to rein in inflation. So, as long as price rises slow, why worry?

The other theory is that the CPI is scheduled for next Wednesday, only three business days after the jobs report. And investors thought they’d wait to see what that says before reacting. That’s possible, but Wall Street rarely delays its reactions to data.

Next week’s economic reports

If it weren’t for next week’s inflation reports, we’d be in for a very quiet seven days. The other scheduled economic reports seldom move mortgage rates far or for long.

But the inflation reports could bring some serious fireworks. Because the sooner price rises begin to slow again, the sooner the Fed can begin cutting general interest rates. And mortgage rates are unlikely to fall consistently until a Fed cut is all but inevitable.

By far the most important of the three inflation reports next week is the March consumer price index. The CPI is, along with the jobs report, one of the two most consequential reports for mortgage rates.

That’s scheduled for next Wednesday. And markets are expecting its March figures to show inflation cooling just a bit. If it cools even more than expected, that could be good for mortgage rates. But, conversely, higher-than-expected numbers could push those rates higher.

The same applies to the two other inflation reports due next week. They’re the:

1. Producer price index (PPI, prices in the wholesale phase of the supply chain) on Thursday
2. Import price index (IPI, prices of imported goods and services as they land in the U.S.) on Friday

As usual, I’ll brief you more fully on the key economic reports the day before each is published.

Next week’s Fed activities

Next Wednesday brings publication of the minutes of the last meeting of the Fed’s rate-setting body, the Federal Open Market Committee (FOMC). These releases certainly can affect mortgage rates.

But I’m hoping that this one, for the March meeting, won’t. Why? Well, the Fed produced a full report immediately following that meeting, followed by a news conference hosted by Fed Chair Jerome Powell. And, since then, FOMC members have spoken in public countless times, often talking about their evolving thoughts on future rate cuts.

So, is anything new left for the minutes to reveal? Perhaps not, but we’ll find out for sure on Wednesday.

Speaking of FOMC members speaking in public, they share eight speaking engagements next week.

Economic reports next week

See above for details about the more important economic reports next week.

In the following list of next week’s reports, only those in bold typically have the potential to affect mortgage rates appreciably. The others probably won’t have much impact unless they contain shockingly good or bad data.

• Monday — None
• Tuesday — March optimism index from the National Federation of Independent Business
• Wednesday — March consumer price index. Also, minutes of the last FOMC (Fed) meeting. Plus wholesale inventories and the federal budget, both for March
• Thursday — March producer price index. Plus initial jobless claims for the week ending Apr. 6
• Friday — March import price index. Also, April consumer sentiment

Watch out for Wednesday!

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

Mortgage rates forecast for next week

Once again, the direction mortgage rates will take pivots on a major economic report, this time the CPI. And, because that’s unknowable before publication, I cannot predict how mortgage rates will move next week.

How your mortgage interest rate is determined

A bond market generally determines mortgage and refinance rates. It’s the one where trading in mortgage-backed securities takes place.

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 something called you “PITI.” That stands for:

• Principal — Pays down the amount you borrowed
• Interest — The price of borrowing
• Taxes — Specifically property taxes
• Insurance — Specifically 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.