Despite high inflation in April, mortgage rates remain low overall

  • Inflation affects mortgage rates; typically, higher inflation results in higher mortgage rates.
  • The cost of goods in April saw the largest 12-month increase in almost 13 years.
  • But this is a temporary spike in inflation, so you don’t need to worry about rates drastically increasing.
  • See Insider’s picks for the best mortgage lenders »

Last Wednesday, the US Bureau of Labor Statistics released its Consumer Price Index for the month of April 2021. The CPI tracks the cost of goods and services, such as food, clothing, electricity, and cars. The CPI is one tool for measuring inflation in the US.

The CPI revealed that the cost of goods and services increased by 4.9% since last April. This is the largest one-year increase since September 2008 — almost 13 years ago.

Prices also went up by 0.8% since March, even though they were only expected to increase by 0.2%.

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Inflation often affects mortgage rates. When inflation and employment numbers are high, the economy is doing well. And mortgage rates go up when the economy is strong.

So, should you worry about mortgage rates going up soon due to high inflation? Probably not.

Why won’t high inflation make mortgage rates increase?

Mortgage rates shouldn’t spike until inflation stays high for a relatively long amount of time, probably months.

April’s high inflation is likely just a temporary occurrence, not a trend.

The US is seeing higher prices in April than March as more places reopen and demand for goods surges. But once it’s seen as the norm for places to be open again, supply should catch up with demand.

Before the pandemic hit in 2020, inflation was relatively low. So April’s spike looks drastic in comparison — that’s why the numbers are so much higher than 12 months ago.

Until the US sees longer stretches of high inflation, mortgage rates should stay low.

This week’s mortgage rates

Mortgage type Average rate today Average rate last week Average rate last month
15-year fixed 2.48% 2.39% 2.51%
30-year fixed 3.35% 3.23% 3.35%
7/1 ARM 4.14% 4.10% 4.29%
10/1 ARM 4.02% 3.73% 3.92%

All mortgage rates are up since last week, but you don’t need to be alarmed. Most of the increases are relatively small and probably aren’t a sign of long-term, significant jumps.

The 15-year fixed and 7/1 ARM rates have decreased since last month, 10/1 ARM rates have increased, and 30-year fixed rates have stayed the same.

This week’s refinance rates

Mortgage type Average rate today Average rate last week Average rate last month
15-year fixed 2.67% 2.61% 2.72%
30-year fixed 3.74% 3.58% 3.68%
7/1 ARM 4.35% 4.31% 4.58%
10/1 ARM 4.68% 4.46% 4.54%

Refinance rates have also gone up this week. Some refinance rates are up since last month, while others are down. Refinance rates are still low overall.

Mortgage and refinance rates by state

Check the latest rates in your state at the links below. 

Alabama
Alaska
Arizona
Arkansas
California
Colorado
Connecticut
Delaware
Florida
Georgia
Hawaii
Idaho
Illinois
Indiana
Iowa
Kansas
Kentucky
Louisiana
Maine
Maryland
Massachusetts
Michigan
Minnesota
Mississippi
Missouri
Montana
Nebraska
Nevada
New Hampshire
New Jersey
New Mexico
New York
North Carolina
North Dakota
Ohio
Oklahoma
Oregon
Pennsylvania
Rhode Island
South Carolina
South Dakota
Tennessee
Utah
Vermont
Virginia
Washington
Washington DC
West Virginia
Wisconsin
Wyoming

About the author

Laura Grace Tarpley is an editor at Personal Finance Insider, covering mortgages, refinancing, and lending. She is also a Certified Educator in Personal Finance (CEPF). Over her five years of covering personal finance, she has written extensively about ways to navigate loans.

Disclosure: This post is brought to you by the Personal Finance Insider team. We occasionally highlight financial products and services that can help you make smarter decisions with your money. We do not give investment advice or encourage you to adopt a certain investment strategy. What you decide to do with your money is up to you. If you take action based on one of our recommendations, we get a small share of the revenue from our commerce partners. This does not influence whether we feature a financial product or service. We operate independently from our advertising sales team.

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