Mortgage rates today, Apr. 13, and rate forecast for next week

Today’s mortgage rates

Average mortgage rates fell moderately yesterday. But they rose significantly over the last seven days, That’s because both the jobs report and the consumer price index were decidedly unfriendly to lower rates.

Yesterday’s fall in mortgage rates gives a glimmer of hope that markets think they went too far in raising them. But I suspect that could be short-lived. And I reckon the most likely scenario is that mortgage rates could rise further next week.

Current mortgage and refinance rates

Should you lock a mortgage rate today?

Recent economic data have changed the mood in markets. And there’s a general belief that all rates will remain “higher for longer” than most had hoped. And that includes mortgage rates.

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

Higher for longer

The Wall Street Journal (paywall) ran a report the day after the consumer price index (CPI) was published. Under the headline, “Fed Rate Cuts Are Now a Matter of If, Not Just When,” it began:

“Another firmer-than-anticipated inflation report delivered a meaningful setback Wednesday to the Federal Reserve’s hope that it could buoy prospects of a so-called soft landing by dialing back some of the past year’s interest-rate increases.

“Solid hiring and the prospect that inflation might settle out closer to 3% than the Fed’s 2% goal could call into question whether the central bank will be able to cut rates until much later in the year without evidence of a sharper slowdown in the economy.”

That’s not an isolated opinion. This morning’s Financial Times says, “Analysts tear up interest rate forecasts as inflation proves more stubborn than most had expected.”

Regular readers will know that the Fed does not set mortgage rates. They’re determined by trading in the bond market for mortgage-backed securities.

But future Fed policy concerning general interest rates hugely influences that market, which trades ahead of events based on expectations. And that’s why this week has been such a bad one for prospective home buyers.

The Fed next week

Markets’ obsession with future rates policy means that investors will be listening closely to public pronouncements by senior Fed officials next week. They’ll want to hear how the CPI and jobs report have shifted the central bank’s thinking on future cuts to general interest rates.

Top Fed officials share 12 speaking engagements next week. But the most influential voice belongs to Fed Chair Jerome Powell. And Wall Street will hang on his every word when he speaks at lunchtime (Eastern) on Tuesday.

Next week’s economic reports

Any economic report can move mortgage rates if it contains sufficiently shocking data. But most don’t move them at all or only by very little almost regardless of how unexpected their figures are.

There’s a hierarchy here. At the top are currently the jobs report and the consumer price index. As we’ve seen over the last eight days, they can cause mortgage rates to soar or plummet. And their impact can last weeks or longer.

Then come reports in the next layer down. They can affect those rates but usually only modestly or moderately and often only for a day or two.

Finally comes the lowest and biggest tier. Its occupants rarely have any impact on mortgage rates.

Next week brings only two from the middle layer, the ones typically with a limited and temporary effect.

They’re Monday’s retail sales data for March and Tuesday’s industrial production for the same month.

Markets are expecting those retail sales figures to show slowing growth: to 0.3% in March from 0.6% in February. A number above 0.3% could push mortgage rates higher while one below that might drag them downward.

I’ll brief you on industrial production on Monday.

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 — March retail sales. Plus the April Empire State manufacturing survey, business inventories in February, and the homebuilder confidence index for April
• Tuesday — March industrial production and capacity utilization. Also, March housing starts and building permits.
• Wednesday — Nothing
• Thursday — Existing home sales and leading economic indicators for March. Plus initial jobless claims for the week ending Apr. 13
• Friday — Nothing

Monday is likely to be the most important day for economic reports next week.

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

Mortgage rates forecast for next week

Mortgage rates aren’t just moved by economic reports and Fed speakers. They’re also affected by the general mood in markets. And that’s unfriendly at the moment. So, I shouldn't be surprised if mortgage rates were to move higher next week, though hopefully not as sharply as this 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.