Mortgage Rate Outlook: What to Expect This Spring

As we move through April, mortgage rates are holding fairly steady. The average 30-year fixed rate is sitting around 6.6%, a bit lower than it was this time last year. That’s thanks in part to the Federal Reserve keeping interest rates unchanged at their last meeting. Inflation is slowly cooling off — now around 2.8% — which is good news, since it means the Fed isn’t under pressure to raise rates further. In fact, if inflation keeps trending in the right direction, the Fed has hinted at possibly lowering rates later this year.

The job market is still solid, which gives the Fed some breathing room. March saw over 200,000 new jobs added across the U.S., and unemployment is still low. Wages are growing at a healthy pace too — not too fast, not too slow. This balance helps keep mortgage rates from jumping.

Looking ahead, global and policy uncertainties are the wild card for interest rates. The recent announcement of new U.S. import tariffs have unsettled financial markets.  Trade conflicts or other global tensions can fuel inflation by raising costs. This being said, barring further trade war escalations, rates are expected to stay close to where they are. If the economy keeps moving in the right direction, we might see slightly lower mortgage rates by the end of the year. For buyers in East Central Indiana, that means borrowing costs should stay manageable, with the potential for small improvements down the road.