Mortgage rates fell almost every day in April. Late last week, that meant the average lender was offering the lowest 30-year conventional fixed rate in more than a month. The first two days of the current week have prices taken in other directionalbeit at a very modest pace.
To get a feel for the magnitude of recent fluctuations, lenders were able to quote interest rates almost everywhere in mid-February below 3%. By mid-March, interest rates were almost half a point higher. They then moved in a volatile sideways range for a few weeks before starting a steady decline in April – a decline that ultimately put rates within 3% of their range.
To be fair, rates below 3% are currently available – especially for purchases – but they are that exception. The average lender is closer to that 3.125% on refi transactions and 3.25% for withdrawal refis. Well-qualified borrowers willing to pay points (also known as higher closing costs in exchange for a lower interest rate) can easily fall below 3%.
Regardless of the lender or scenario, costs were incurred gradually increasing in the last 2 days. This is limited to the “upfront” side of the equation as opposed to the interest rates themselves. However, if the trend continues for a few more days it becomes 3.125% to 3.250%.
The greater risk is that we just saw interest rates “cool down” in April and that the rising interest rates of 2021 could be revived in the coming months. However, this risk is not yet high enough to cause stress. We’ll talk about it when it looks like things are going to change.