Mortgage rates today, Mar. 23, and rate forecast for next week

Today’s mortgage rates

Average mortgage rates fell moderately yesterday. It was the third consecutive day of falls, and you now have to go back more than 10 days to find lower averages.

I’m hoping mortgage rates could fall next week. But that’s far from certain; decreases are already losing momentum. Still, it’s looking unlikely that economic data will force them to rise, especially as bond markets will be closed on Good Friday when a big inflation report is released.

Current mortgage and refinance rates

Should you lock a mortgage rate today?

The Federal Reserve did us a huge favor this week by leaving intact its plans for 2024 cuts to general interest rates. But I suspect we still might not see the start of a sustainable downward trend in mortgage rates until June and possibly later.

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

Next week’s inflation report

Few of the economic reports on next week’s calendar typically move mortgage rates far or for long. Indeed, only one has the potential to push them significantly higher or pull them appreciably lower.

That’s due on Friday and is February’s personal consumption expenditures (PCE) price index. Yes, that’s the Federal Reserve’s preferred gauge of inflation

Yet it tends to be less consequential for mortgage rates than either its rival consumer price index (CPI) or the jobs report. Still, it’s probably No. 3 among all economic reports in terms of its potential influence.

PCE breakdown

Like the CPI, the PCE price index comprises four main elements:

1. February PCE — The amount by which all items in the index moved during that month
2. February core PCE — The amount by which all items in the index moved during that month excluding food and energy prices
3. Year-over-year (YOY) PCE — The amount by which all items in the index moved between Mar. 1, 2023 and Feb. 29, 2024
4. YOY core PCE — The amount by which all items in the index excluding food and energy prices moved between Mar. 1, 2023 and Feb. 29, 2024

Why bother with “core” readings? It’s because the Fed and most economists pay most attention to those figures. Food and energy prices are volatile and their extreme movements distort the inflation picture. Removing the “noise” they create allows economists to see underlying inflation.

What to look out for

Investors tend to trade ahead of each important economic report based on expert forecasts, aka “analysts’ consensus forecasts.” So, on the day, it’s typically the gap between what markets were expecting and the report’s actual numbers that generates the big movements in stocks, bonds and mortgage rates.

So, what are the expert forecasts for next Friday’s PCE price index? Well, according to MarketWatch, markets are expecting:

1. February PCE — Markets expecting 0.4%. (Actual 0.3% in January)
2. February core PCE — Markets expecting 0.3%. (Actual 0.4% in January)
3. Year-over-year (YOY) PCE — Markets expecting 2.5%. (Actual 2.4% in January)
4. YOY core PCE — Markets expecting 2.8%. (Actual 2.8% in January)

For mortgage rates to fall, we will likely need actual figures lower than those that markets are expecting.

Strangely, bond markets will be closed on the day of publication for the Good Friday holiday. So, the bonds that largely determine mortgage rates won’t be able to move in response to the data before the following Monday.

Other potentially significant economic reports next week

The PCE price index is likely to make the biggest difference to mortgage rates next week. But other reports could nudge them up or down. Indeed, if their data are shocking enough, they could have a bigger impact.

Those reports are:

• Third and final reading of gross domestic product (GDP) during the last quarter of 2023 (Q4/23) (Thursday) — Markets expecting 3.2%, unchanged from the second reading
• February durable goods orders (Tuesday) — Markets expecting 1.0% (-6.2% in January)
• March consumer confidence (Tuesday) — Markets expecting 106.5 (106.7 in February)
• March consumer sentiment (Thursday) — Markets expecting 76.5 (76.5 in February)

Again, our best hope for lower mortgage rates is numbers lower than market expectations.

Also next week, several senior Federal Reserve officials have speaking engagements. The most important of these will be on Friday when Fed Chair Jerome Powell takes to the stage.

By the way, I mentioned yesterday the possibility of an imminent government shutdown. The U.S. Congress passed a spending bill early on Saturday morning that averted that.

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 — February new home sales
• Tuesday — March consumer confidence. Plus February durable goods orders. Also, January S&P Case-Shiller home price index
• Wednesday — Nothing
• Thursday — Q4/23 GDP final reading. Also, March consumer sentiment and Feb. pending home sales. Plus initial jobless claims for the week ending Mar. 23
• Friday — February PCE price index. Also, Fed chair’s speech. But bond markets closed for Good Friday holiday

Next Friday might be important for mortgage rates. But we probably won’t see any effect until the following Monday.

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

Mortgage rates forecast for next week

I’m going to stick my neck out and say that mortgage rates might move lower next week. But these weekly predictions always come with low levels of confidence. And I reckon that outcome’s only slightly more likely than higher or unchanged readings this time 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.