It'll be difficult for mortgage rates to post a meaningful and sustained pullback from 7 percent until there is greater consensus on what is next with inflation. — Greg McBride, Bankrate Chief Financial Analyst

Mortgage rates fell sharply to close out 2023, but have remained relatively stable at 7 percent so far this spring. As of March 27, the average rate on 30-year loans was 7.01 percent, according to Bankrate’s survey of lenders.

The key wild card: dialed-back expectations about how quickly the Federal Reserve cuts rates this year.  The Fed keeps delaying a rate cut largely because the U.S. economy remains surprisingly strong. Unemployment is just 3.9 percent, and economic growth was a robust 3.3 percent in the fourth quarter of 2023. Inflation rose to 3.2 percent for February, a figure that remains well above the central bank’s official target of 2 percent.

As a result of the Fed’s uncertain timeline, investors have bid up 10-year Treasury yields, the informal benchmark for 30-year fixed mortgage rates.

“The bond market at the start of this year thought they were going to cut six times,” says Robert Dietz, chief economist at the National Association of Home Builders. “That was not going to happen. The macroeconomic environment was too strong.”

Mortgage rate predictions April 2024

Many forecasters still expect mortgage rates to fall below 7 percent this year, but for now, stubborn inflation numbers are keeping rates higher than hoped.

“The jury is still out as to whether what we’re seeing with inflation is just a blip or a threat to undo some of the progress toward lower inflation seen in 2023,” says Greg McBride, CFA, chief financial analyst for Bankrate. “It’ll be difficult for mortgage rates to post a meaningful and sustained pullback from 7 percent until there is greater consensus on what is next with inflation.”

After rising sharply through October 2023, mortgage rates have settled around 7 percent. The average rate on a 30-year mortgage was 7.01 percent as of March 27, according to Bankrate’s survey. While that’s a welcome drop from 8.01 percent on Oct. 25 of last year, it’s still higher than the 6 percent rates seen in January.

Bankrate’s weekly mortgage rate averages differ slightly from the statistics reported by Freddie Mac, the government-sponsored enterprise that buys mortgages and packages them as securities. Bankrate’s rates tend to be higher because they include origination points and other costs, while Freddie Mac removes those figures and reports them separately. However, both Bankrate and Freddie Mac report similar overall trends in mortgage rates.

When will mortgage rates go down?

Overall, forecasters expect mortgage rates to continue easing. However, they’ve dialed back their expectations for a sharp drop in rates.

While McBride had expected mortgage rates to fall to 5.75 percent by late 2024, the new economic reality means they’re likely to hover in the range of 6.25 percent to 6.4 percent by the end of the year, he says.

Mortgage giant Fannie Mae likewise raised its outlook, now expecting 30-year mortgage rates to be at 6.4 percent by the end of 2024, compared to an earlier forecast of 5.8 percent.

“A lot of us forecasted we’d be down to 6 percent at the end of 2023,” says Lisa Sturtevant, chief economist at Bright MLS, a large listing service in the Mid-Atlantic region. “Surprise, surprise, we [weren’t].”

One variable has been the unusually large gap between mortgage rates and 10-year Treasury yields. Normally, that spread is about 1.8 percentage points, or 180 basis points. This year, the gap has been more like 280 basis points, pushing mortgage rates a full percentage point higher than the 10-year benchmark indicates.

“There is room for that gap to narrow,” says Sturtevant, “but I’m not sure we’ll get back to those old levels. In this post-pandemic economy, the old rules don’t seem to apply in the same ways. We’re sort of figuring out what the reset is. Investors have a different outlook on risk now than they did before the pandemic. We’re just in this weird transition economy.”

What to do if you’re getting a mortgage now

Mortgage rates are at generational highs, but the basic advice for getting a mortgage applies no matter the economy or market:

  • Improve your credit score. A lower credit score won’t prevent you from getting a loan, but it can make all the difference between getting the lowest possible rate and more costly borrowing terms. The best mortgage rates go to borrowers with the highest credit scores, usually at least 740. In general, the more confident the lender is in your ability to repay the loan on time, the lower the interest rate it’ll offer.
  • Save up for a down payment. Putting more money down upfront can help you obtain a lower mortgage rate, and if you have 20 percent, you’ll avoid mortgage insurance, which adds costs to your loan. If you’re a first-time homebuyer and can’t cover a 20 percent down payment, there are  loans, grants and programs that can help. The eligibility requirements vary by program, but are often based on factors like your income.
  • Understand your debt-to-income ratio. Your debt-to-income (DTI) ratio compares how much money you owe to how much money you make, specifically your total monthly debt payments against your gross monthly income. Not sure how to figure out your DTI ratio? Bankrate has a calculator for that.
  • Check out different mortgage loan types and terms. A 30-year fixed-rate mortgage is the most common option, but there are shorter terms. Adjustable-rate mortgages have also regained popularity recently.


  • It might seem like a bank or lender are dictating mortgage terms, but in fact, mortgage rates are not directly set by any one entity. Instead, mortgage rates grow out of a complicated mix of economic factors. Lenders typically set their rates based on the return they need to make a profit after accounting for risks and costs.

    The Federal Reserve doesn’t directly set mortgage rates, but it does set the overall tone. The closest proxy for mortgage rates is the 10-year Treasury yield. Historically, the typical 30-year mortgage rate was about 2 percentage points higher than the 10-year Treasury yield. In 2023, that “spread” was more like 3 percentage points.
  • Mortgage rates have jumped to 23-year highs, so not many borrowers are opting to refinance their mortgages now. However, if rates come back down, homeowners could start looking to refinance.

    Deciding when to refinance is based on many factors. If rates have fallen since you originally took out your mortgage, refinancing might make sense. A refi can also be a good idea if you’ve improved your credit score and could lock in a lower rate or lower fees. A cash-out refinance can accomplish that as well, plus give you the funds to pay for a home renovation or other expenses.