Mortgage Rates Near 3.5-Year Lows Offer Limited Downside, But Floating Carries Risk

Mortgage rates remain about 0.5 percentage points above their 3.5-year low from late February, despite a significant decline in March. A low-6% 30-year fixed rate is currently favorable compared to recent years, but further improvement may be limited. Oil prices near $100 per barrel and the ongoing blockade of the Strait of Hormuz continue to pressure rates upward. With no major economic data expected until the April jobs report on May 8, the timing and direction of future rate movement remain uncertain. Floating a mortgage rate now carries risk, particularly if the Middle East conflict escalates further.