April Interest Rates – What to Expect

Less than a month away from the next Federal Reserve meeting, tentatively scheduled for March 21-22, 2023, we’re taking a look at the past three years of interest rate changes to prepare for changes we could see in April of 2023.

Looking Back: Recovering From the Pandemic

To get a better look at where interest rates are going, it’s important to remember where they’ve been. The past three years have brought monumental changes that are helpful to learn about in order to form realistic, accurate expectations for April’s rates.


In 2020, mortgage rates experienced record lows at the hand of the Federal Reserve. In an effort to stimulate lending, the Federal Reserve cut the benchmark rate to essentially zero. This set an extremely low floor for other rates to build on. In July, the 30-year fixed rate fell below 3% for the first time. At the end of 2020, Freddie Mac reported mortgage rates of 2.68%.

Average 30-year rate: 3.10%


In 2021, we continued to see evidence that the mortgage industry was in flux and that the Fed wanted to make lending an affordable option for many. While not perfectly correlated, the 30-year fixed rate fell to 2.65% in January, and rates stayed at historic lows through the end of the year, fluctuating around 3%.

Average 30-year rate: 2.96%


In an attempt to recover from extremely high prices, interest rates took a steep climb in 2022. The Fed hiked its benchmark rate seven times, four of which were historic rate hikes of 75 basis points (0.75%).

This rapid rate increase dramatically slowed the pace of total home sales, declining from an annualized pace of seven million units in January 2022 to only five million units in October 2022, a striking 40% decrease.

In December of 2022, the Federal Reserve steered mortgage rates in a borrower-friendly direction, cutting the federal funds rate by 50 basis points (0.50%). This hinted at a return to economic normalcy, a decision giving hope to a possible regulating of the extreme economic volatility experienced earlier in the year.

Average 30-year rate: 5.34%

Looking Forward: Pumping the Breaks on Inflation


The Fed continues to modulate pace in 2023. The current federal funds rate now varies between 4.5% and 4.75%. Their February decision to raise rates by a modest 0.25% reflects their view of the current economic state as a peak, requiring a gentle decline. This increase does not necessarily disprove previous expectations that the Fed would make strides to contain inflation this year — they are closely monitoring inflation, while being mindful of the drastic effects that large changes in the base rate can have on the economy as a whole.

A recent statement from the Fed signaled that the FOMC sees the need for “ongoing increases in the target range” until inflation reaches its target range of 5.25% to 5.5%. Exact predictions of how the Fed will use interest rates to steer the economy are uncertain, as Morningstar predicts the Fed is “likely done with its rate hike campaign.”

Average 30-year rate: 7.17%

How to Mortgage Shop in 2023

The past three years have brought unprecedented volatility, expected to simmer this year. It’s becoming increasingly valuable to have an experienced mortgage lending team on your side when mortgage shopping. Navigate next month’s changing interest rates with confidence with the mortgage experts at CDM. Get in touch with our team today for more interest rate updates.