Today's Mortgage Rates - 04/03/2025

Rates Heading Lower Amid Tariff Turmoil

Mortgage rates were mixed again this week, but the next step is down.

As reported by Freddie Mac today, the average offered interest rate for a conforming 30-year fixed-rate mortgage (FRM) declined by just one basis point (0.01%) this week, settling back to 6.64%, a fifth week of near stasis for rates on the most popular mortgage type and term.

Average offered rates for 15-year fixed-rate mortgages retreated rather a bit more, falling by seven basis points (0.07%) to retreat to 5.82%. Like its longer-term sibling, this average has barely changed since a late-February into early March decline.

A 5/1 ARM might offer a homebuyer a lower-cost alternative to a long-term fixed-rate mortgage, but the difference in rate between 30-year FRMs and 5-year hybrid ARMs shrank measurably this week. The Mortgage Bankers Association said that the initial fixed interest rate on a hybrid 5-year ARM rose by fifteen basis points (0.15%), moving up to 6.04%. This tightened the gap in rate compared to a 30-year FRM to only sixty basis points (0.60%). The narrower differential in rate is less likely to attract early spring homebuyers to select an ARM as their choice of financing, as the reward for doing so has lessened of late.

While financial markets have been restive in recent weeks, the announcement of sweeping increases and changes in tariffs across all of the U.S. trading partners has upended them. Significant selloffs in stocks and other assets has been to the benefit of bonds, and the inflow of cash has driven down yields. In turn, this will press mortgage rates lower in the coming days.

What's less clear is how far they might decline or how durable the decline will be. Much depends on how other countries respond, how much the economy is impacted and the effects on inflation. Nervous investors wallowing in uncertainty are likely to continue to seek shelter in bonds, but twitchy markets are unpredictable.

At the moment, the yield on the influential 10-year Treasury is hovering just above 4%, down perhaps a quarter of a percentage point from where it was mid-late last week. That suggests perhaps a 10-15 basis point decline in 30-year FRMs in the market over the next day or so, provided present levels can hold. If so, this will be about a six-month low for rates, right in time for at least some spring homebuyers.

Each week in HSH's MarketTrends newsletter, we track and discuss economic conditions that affect mortgage rates and their impact on housing markets and consumers. Read the most recent edition of MarketTrends or subscribe for email delivery.