Current Mortgage Rates

Mortgage rates were steady this week after the market digested the latest Fed meeting minutes and several important economic reports last week.  The March meeting minutes showed that a majority of Fed members expect no additional interest rate hikes this year, although a small number of members said a rate hike may be necessary if the economy performs better than expected.  A strong employment report, record low jobless claims and improved GDP forecasts suggest the economy may not be heading toward a recession and pushed mortgage rates higher over the past two weeks.

Mortgage rates had dipped following the Fed's decision to hold rates steady at its March meeting.  The Fed highlighted slowing U.S. and international economic growth, sluggish consumer spending and business investment and a "solid" but not "strong" labor market in keeping the target range for the Federal Funds rate at 2.250% - 2.500%.  Continued moderate inflation and a reduction in economic growth projections for this year and next led the Fed to reiterate its "patient" approach to monetary policy.  The meeting minutes also confirmed the Fed's plan to end its balance sheet reduction program by September, three months earlier than expected, providing additional relief for mortgage rates.

Multiple developments have occurred since the March meeting that have positively addressed the economic concerns raised in the Fed statement and minutes.  The March employment report showed that the U.S. economy added more jobs than expected while jobless claims continue to hit fifty year lows.  Additionally, signs continue to point to a new trade deal with China, potentially ending a dispute that has cast a shadow over the U.S. economy.  These events combined to ease the risk of a potential recession while applying upward pressure to mortgage rates the past several weeks.  The mortgage market seems to have processed the latest economic news as rates stabilized this week.  

The interest rate for a 30 year fixed rate mortgage was flat at 4.000% while the rate for a 15 year fixed rate mortgage held steady at 3.500%.  FHA mortgage rates and VA mortgage rates remained at 3.500%, with both programs remaining attractive to borrowers focused on low or no down payment programs, especially first-time home buyers.  Jumbo mortgage rates stayed put at 4.000%, matching conforming loan rates as lenders court higher income borrowers.  Non-owner occupied mortgage rates held at 4.250%, which is still a relatively attractive rate for investment property buyers.  In positive news for borrowers, the interest rate on a 5/1 adjustable rate mortgage (ARM) dipped 0.125% to 3.625%, as shorter term financing became more attractive.   

After eight rate increases over four years, the January and March Fed meetings signaled a significant shift in policy.  The Fed's newfound patience and more flexible strategy enable it to tighten or loosen monetary policy (or remain in neutral) as economic conditions dictate.  Although the March meeting minutes support steady rates for the remainder of 2019, a handful of Fed board members believe higher rates could be necessary if the economy continues to accelerate.  This is mixed news for mortgage borrowers and a housing market that has been battered by fluctuating rates and limited supply.  

Because interest rates are impossible to predict prospective borrowers looking to buy a home or refinance should take advantage of any market dips or plateaus as rates can change quickly.  Additionally, as lenders react differently to dynamic market conditions, we have seen a wider variation in mortgage rate pricing, which means borrowers benefit more by shopping multiple lenders.

Because interest rates change constantly, we continue to actively monitor the market for new developments.  Borrowers should check the FREEandCLEAR rate tables regularly to review personalized, updated mortgage rates for lenders in their area.  Our rate tables are free to use and require no personal information.