Today's Mortgage Rates - 04/01/2025

Mortgage Rates Mixed This Week

Mortgage rates either went down slightly or up slightly this week, depending on your choice of term.

Freddie Mac reported today that the average offered interest rate for a conforming 30-year fixed-rate mortgage (FRM) declined by two basis points (0.02%) this week, settling back to 6.65%, right where it was two weeks ago.

Conversely, average offered rates for 15-year fixed-rate mortgages firmed a bit, rising by six basis points (0.06%) to 5.89%. Like its longer-term sibling, this average has barely changed over the last four weeks.

A 5/1 ARM might offer a homebuyer a lower-cost alternative to a long-term fixed-rate mortgage, and the difference in rate between 30-year FRMs and 5-year hybrid ARMs shrank slightly this week. The Mortgage Bankers Association said that the initial fixed interest rate on a hybrid 5-year ARM rose by five basis points (0.05%), moving up to 5.89%. This tightened the gap in rate compared to a 30-year FRM to seventy-six basis points (0.76%). A three-quarter percent differential in rate may be considerable enough to entice some early spring homebuyers to select an ARM as their choice of financing, as reasonable savings can be had, at least in the first five years of the loan.

Investors continue to try to figure out what changing trade and fiscal policies mean for the economy, both near-term and long. It appears that this week the focus has returned to inflation concerns. For much of this week, and despite lower long-term mortgage rates, the influential yield on the 10-year Treasury has pressed higher all week, making it very unlikely that mortgage rates will be able to hold present levels for very long.

As we discussed in last week's MarketTrends newsletter, the "hard" data for the economy -- actual economic reports from various sources -- is still pretty fair. That said, most of it is backward-looking by a month or more, and much of the current "soft" data -- sentiment surveys, opinions regarding economic trends, recession forecasts -- have suggested a darkening outlook for the period ahead.

It's not clear which of these diverging observations will prove correct, but it is true that a sustained poor outlook can influence the borrowing and spending habits of both businesses and consumers alike, and such behavior would start to be seen in the hard data at some point. For now, significant drivers of the economy such as consumer spending and labor conditions remain okay and may be able to do so despite rising headwinds.

With the firming in underlying yields, mortgage rates have or will shortly firm up again, probably moving back to late February levels. Fortunately, that's not very far from where they presently stand.

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.