Today’s mortgage and refinance rates: April 24, 2023

Our experts answer readers’ questions about buying a home and write unbiased product reviews (this is how we rate mortgages). In some cases, we receive a commission of our partners; however, our opinions are our own.

Projection of mortgage rates for 2023

Mortgage rates started to recover from historic lows in the second half of 2021 and increased by more than three percentage points in 2022. Many forecasts are for rates to drop later this year. In their latest predictions, Fannie Mae the researchers predicted that the 30-year fixed rates will trend lower throughout 2023 and 2024.

But whether mortgage rates will fall in 2023 depends on the Federal Reserve’s ability to control inflation.

In the past 12 months, the consumer price index increased by 5%. This is only a slight slowdown from the previous month, and the Fed should take this as a sign that it still has some work to do.

If the Fed acts too aggressively and engineer a recession, mortgage rates could fall further than currently forecast. But rates are unlikely to fall to the historic lows that borrowers enjoyed a few years ago.

Today’s Mortgage Rates

The current average 30-year fixed mortgage rate is 6.39% for the week ending April 20, according to Freddie Mac. This is an increase from the previous week and above the four-week average of 6.32%, breaking the downward trend in rates over the last month and a half.

Should I get a HELOC? Advantages and disadvantages

If you’re looking to tap into the equity in your home, a HELOC might be the best way to do it right now (Insider has a guide to the best HELOC lenders). Unlike a cash refinanceyou won’t have to get a whole new mortgage with a new interest rate, and you’ll probably get a better rate than with a home equity loan.

But HELOCs don’t always make sense. It is important to consider the Advantages and disadvantages of HELOC.

HELOC Benefits

• Only pay interest on what you borrow
• They usually have lower rates than alternatives, including home equity loans, personal loans and credit cards
• If you have a lot of equity, you could potentially borrow more than you could get with a personal loan.

Against HELOC

• Rates are variable, which means your monthly payments could increase
• Withdrawing equity from your home can be risky if the value of the property drops or you fail to repay the loan
• The minimum withdrawal amount may be more than you wish to borrow

When will house prices go down?

House prices are starting to fall, but we probably won’t see huge dropseven in a recession.

THE S&P Case-Shiller Home Price Index shows that prices are still up year over year, although they have fallen on a monthly basis. Fannie Mae researchers expect prices to fall 4.2% in 2023, while the Mortgage Bankers Association expects a decline of 0.6% in 2023 and a decline of 1.4% in 2024.

Skyrocketing mortgage rates have pushed many hopeful buyers out of the market, slowing demand for home purchases and putting downward pressure on home prices. But rates could start to come down this year, taking some of that pressure off. The current housing supply is also historically lowwhich will likely prevent prices from falling too far.

What happens to house prices in a recession?

House prices generally fall during a recession, but not always. When this happens, it’s usually because fewer people can afford to buy homes and weak demand forces sellers to lower their prices.

How much mortgage can I afford?

A mortgage calculator can help you determine how much you can afford to borrow. Play around with different house prices and down payment amounts to see how much your monthly payment might be, and think about how that fits into your overall budget.

As a general rule, experts recommend spending no more than 28% of your gross monthly income on housing expenses. This means that your total monthly mortgage payment, including taxes and insurance, should not exceed 28% of your pre-tax monthly income.

The lower your rate, the more you can borrow, so shop around and Get pre-approved with many mortgage lenders to see who can offer you the best rate. But remember not to borrow more than your budget can comfortably support.