Mortgage rates fell a little today on a combination of good economic news: lower inflation and lower oil prices. These forces have a positive effect on the bond market, which in turn affects mortgage rates.
The average interest rate on a 30-year, fixed-rate mortgage ticked down to 6.53% APR, according to rates provided to NerdWallet by Zillow. This is three basis points lower than yesterday and one basis point lower than a week ago. (See our chart below for more specifics.) A basis point is one one-hundredth of a percentage point.
Though this wasn’t much of a move, if you’re shopping for a home or thinking about refinancing, this might be a sign to start following rates a bit more closely. Even if rates aren’t necessarily going down each day, you might feel more ready to make your move if the overall trend is downward.
While the economy never sleeps, markets are closed on the weekends. The rates you see Friday are unlikely to change much (if at all) until Monday.
Average mortgage rates, last 30 days
📈 What influences mortgage rates?
Mortgage rates are constantly changing, since a major part of how rates are set depends on reactions to new inflation reports, job numbers, Fed meetings, global news … you name it. For example, even tiny changes in the bond market can shift mortgage pricing.
Mortgage rates have been relatively steady lately, thanks in part to this week’s Consumer Price Index. Annual inflation cooled slightly to 3.4% in July from 3.5% in June. That’s only a modest improvement, but the reading was in line with forecasts — and markets don’t like surprises.
Next week, the Nerds are watching the Federal Reserve’s July meeting minutes, due Wednesday. The Fed held rates steady in July, but three officials voted for a quarter-point hike. The minutes could shed more light on just how worried central bankers are about inflation — which is easing, but still higher than the Fed’s 2% target. The minutes could also signal whether there’s broader support for raising rates at the Fed’s September meeting.
We know the Fed doesn’t set mortgage rates. People say the Federal Reserve raises or cuts rates, but really it’s just one rate: The federal funds rate, which is an overnight borrowing rate for banks. But that super-short-term rate is highly influential. Changes to the federal funds rate ripple outward to every corner of the economy. When it looks like the Fed could make a move, mortgage lenders tend to start pricing it into their rates ahead of any official announcement.
Meanwhile, weekly jobless claims will offer a fresh read on the labor market on Thursday. Signs that layoffs are picking up could make the case for a September hike more complicated, while a strong showing from the labor market could give the Fed more leverage to focus on inflation. For mortgage rates, either breadcrumb of information could move the needle if it gives investors a reason to rethink where Fed policy is headed next.
Refinancing might make sense if today’s rates are at least 0.5 to 0.75 of a percentage point lower than your current rate (and if you plan to stay in your home long enough to break even on closing costs).
With rates where they are right now, you could start considering a refi if your current rate is around 7.03% or higher.
Also consider your goals: Are you trying to lower your monthly payment, shorten your loan term or turn home equity into cash? For example, you might be more comfortable with paying a higher rate for a cash-out refinancethan you would for a rate-and-term refinance, so long as the overall costs are lower than if you kept your original mortgage and added a HELOC or home equity loan.
If you’re looking for a lower rate, use NerdWallet’s refinance calculator to estimate savings and understand how long it would take to break even on the costs of refinancing.
🏡 Should I start shopping for a home?
There is no universal “right” time to start shopping — what matters is whether you can comfortably afford a mortgage now at today’s rates.
If the answer is yes, don’t get too hung up on whether you could be missing out on lower rates later; you can refinance down the road. Focus on getting preapproved, comparing lender offers, and understanding what monthly payment works for your budget.
NerdWallet’s affordability calculator can help you estimate your potential monthly payment. If a new home isn’t in the cards right now, there are still things you can do to strengthen your buyer profile. Take this time to pay down existing debts and build your down payment savings. Not only will this free up more cash flow for a future mortgage payment, it can also get you a better interest rate when you’re ready to buy.
🔒 Should I lock my rate?
If you already have a quote you’re happy with, you should consider locking your mortgage rate, especially if your lender offers a float-down option. A float-down lets you take advantage of a better rate if the market drops during your lock period.
Rate locks protect you from increases while your loan is processed, and with the market forever bouncing around, that peace of mind can be worth it.
🤓 Nerdy Reminder: Rates can change daily, and even hourly. If you’re happy with the deal you have, it’s okay to commit.
🧐 Why is the rate I saw online different from the quote I got?
The rate you see advertised is a sample rate — usually for a borrower with perfect credit, making a big down payment, and paying for mortgage points. That won’t match every buyer’s circumstances.
In addition to market factors outside of your control, your customized quote depends on your:
Even two people with similar credit scores might get different rates, depending on their overall financial profiles.
👀 If I apply now, can I get the rate I saw today?
Maybe — but even personalized rate quotes can change until you lock. That’s because lenders adjust pricing multiple times a day in response to market changes.
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