Today's Mortgage and Refinance Rates: April 26, 2023 | As Rates Drop, Housing Market may be Turning a Corner

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Though average mortgage rates increased slightly last week, they've generally been trending down over the last month and a half. Lower rates have sparked a slight increase in homebuying demand, which has in turn helped push home prices back up. 

In February, the CoreLogic S&P Case-Shiller Index, which measures US home price changes, increased 2% year over year, a slight deceleration compared to January. But in an emailed statement, CoreLogic chief economist Selma Hepp noted that the index increased on a monthly basis for the first time in seven months, "suggesting that home prices nationally have bottomed out."

Rising home prices are a sign that the housing market may finally be recovering from its slump. This could potentially help the broader economy avoid a severe recession.

"Still, the housing markets continue to vary across markets and price tiers, but lower mortgage rates and low inventories have been helpful in providing the floor for prices in markets where prices seemed to have nosedived following mortgage rate surge," Hepp said.

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Use our free mortgage calculator to see how today's mortgage rates will affect your monthly and long-term payments.

By plugging in different term lengths and interest rates, you'll see how your monthly payment could change.

30-Year Fixed Mortgage Rates

Average 30-year fixed mortgage rates inched up to 6.39% last week, according to Freddie Mac. This is a 12-basis-point increase compared to the week before, though rates remain 34 basis points lower than their early March peak.

The 30-year fixed-rate mortgage is the most common type of home loan. With this type of mortgage, you'll pay back what you borrowed over 30 years, and your interest rate won't change for the life of the loan.

The lengthy 30-year term allows you to spread out your payments over a long period of time, meaning you can keep your monthly payments lower and more manageable. The trade-off is that you'll have a higher rate than you would with shorter terms or adjustable rates. 

15-Year Fixed Mortgage Rates

The average 15-year fixed mortgage rate is 5.76%, an increase from the prior week, according to Freddie Mac data.

If you want the predictability that comes with a fixed rate but are looking to spend less on interest over the life of your loan, a 15-year fixed-rate mortgage might be a good fit for you. Because these terms are shorter and have lower rates than 30-year fixed-rate mortgages, you could potentially save tens of thousands of dollars in interest. However, you'll have a higher monthly payment than you would with a longer term.

Are Mortgage Rates Going Up?

Mortgage rates started ticking up from historic lows in the second half of 2021 and increased significantly in 2022. But mortgage rates are expected to trend down this year.

In the last 12 months, the consumer price index rose by 5%. The Federal Reserve has been working to get inflation under control, and is expected to keep the federal funds rate elevated until it comes down to the Fed's target rate of 2%.

Inflation remains elevated, but has started to slow, which is a good sign for mortgage rates and the broader economy. 

How Do Fed Rate Hikes Affect Mortgages?

The Fed has been increasing the federal funds rate to try to slow economic growth and get inflation under control.

Mortgage rates aren't directly impacted by changes to the federal funds rate, but they often trend up or down ahead of Fed policy moves. This is because mortgage rates change based on investor demand for mortgage-backed securities, and this demand is often impacted by how investors expect Fed hikes to affect the broader economy. 

As inflation starts to come down, mortgage rates should, too. But the Fed has indicated that it's watching for sustained signs of slowing inflation, and it's not going to lower rates again any time soon — though it has started opting for smaller hikes.

Are HELOCs a Good Idea Right Now?

Many homeowners gained a lot of equity over that past few years as home prices increased at an unprecedented rate. But because rates are so high now, tapping into that equity can be expensive. 

For homeowners looking to leverage their home's value to cover a big purchase — such as a home renovation — a home equity line of credit (HELOC) may still be a good option. 

A HELOC is a line of credit that lets you borrow against the equity in your home. It works similarly to a credit card in that you borrow what you need rather than getting the full amount you're borrowing in a lump sum. 

Depending on your finances and the type of HELOC you get, you may be able to get a better rate with a HELOC than you would with a home equity loan or a cash-out refinance. Just keep in mind that HELOC rates are variable, so if rates start to trend up further, yours will likely increase, as well.