Mortgage Rates Are Lower Than Usual Right Now

Borrowers who are ready to act may want to lock in a mortgage rate sooner rather than later. Rates available now are among the lowest seen in recent weeks.

The average rate on a 30-year fixed mortgage fell to 7.1% APR, according to Zillow rates supplied to NerdWallet. That is 10 basis points below the previous day and 18 basis points lower than a week earlier. A basis point equals one-hundredth of a percentage point.

The Federal Reserve is set to announce its rate decision, and central bankers are widely expected to leave the federal funds rate unchanged. Lenders and investors will also be watching the post-meeting press conference closely for clues about future policy moves. Markets are currently pricing in a rate increase later in the year.

While the Fed does not directly set mortgage rates, mortgage borrowing costs often move in the same general direction as the federal funds rate. Changes in that benchmark tend to ripple through the economy and influence mortgage pricing.

Average mortgage rates, last 30 days

» Take the next step: Compare mortgage rates from NerdWallet’s top lenders

🤓 Kate on Rates

📈 What influences mortgage rates?

Mortgage rates move constantly because lenders react to fresh inflation readings, employment data, Fed decisions, global developments and other market forces. Even small shifts in the bond market can affect mortgage pricing.

At the moment, inflation is a key focus. The Federal Open Market Committee is wrapping up a meeting, and although policymakers are not expected to change the funds rate, their view of inflation matters to markets. Investors will also be looking for hints about what comes next.

Additional inflation data is due soon from the Bureau of Economic Analysis. Even if it arrives too late to influence this particular Fed meeting, it can still show whether inflation is rising or cooling.

What that means for mortgage rates is less straightforward.

If inflation appears to be running hot, rates often rise because bonds become less attractive and the Fed may be more likely to lift the funds rate later. Even though the Fed does not directly set mortgage rates, shifts in its policy usually affect the broader economy, including housing finance.

But persistent inflation can also push investors away from risky assets and toward bonds as a safer place to park money. In that case, yields — and mortgage rates — could move lower.

» Learn more: How the Fed affects mortgage rates

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🔁 Should I refinance?

Refinancing may be worth considering if current rates are at least 0.5 to 0.75 percentage points below your existing mortgage rate, and if you plan to stay in the home long enough to recoup closing costs.

At today’s levels, homeowners with rates around 7.6% or higher may want to look more closely at refinancing, though relatively few borrowers are likely in that position.

Your personal goals also matter. You may want to lower your monthly payment, shorten your loan term or tap home equity for cash. A cash-out refinance can make sense even at a somewhat higher rate if the total cost is still lower than keeping the original mortgage and adding a home equity line of credit or home equity loan.

If you are considering a lower rate, a refinance calculator can help estimate potential savings and show how long it may take to break even on the costs.

🏡 Should I start shopping for a home?

There is no single right moment to begin house hunting. The key question is whether you can comfortably afford a mortgage at current rates.

If you can, it may be better to focus on preapproval, compare lender offers and determine what monthly payment fits your budget instead of waiting for a possibly lower rate later. If rates do fall in the future, refinancing remains an option.

An affordability calculator can help estimate your monthly payment. If buying a home is not realistic right now, you can still strengthen your position by paying down debt and saving for a down payment. That can improve cash flow and may also help you qualify for a better rate later.

» Is now a good time to buy? See NerdWallet’s analysis

🔒 Should I lock my rate?

If you already have a quote you like, locking it in may be a smart move, especially if your lender offers a float-down option that lets you benefit if rates improve during the lock period.

Rate locks shield borrowers from increases while the loan is being processed, and that protection can be valuable in a volatile market.

🤓 Nerdy Reminder: Rates can change daily, and even hourly. If you’re happy with the deal you have, it’s okay to commit.

» Stay informed: Check out NerdWallet's mortgage news hub for all our latest coverage.

🧐 Why is the rate I saw online different from the quote I got?

Advertised rates are usually sample rates based on borrowers with excellent credit, large down payments and the purchase of mortgage points. Those figures will not match every borrower’s situation.

Beyond broader market conditions, your personalized quote depends on factors such as:

• Credit score

• Debt-to-income ratio

• Employment history

• Down payment

• Type of mortgage

• Location and property type

• Loan amount

Even borrowers with similar credit scores can receive different rates based on their overall financial profiles.

» Get the best rate for you: How to get the best mortgage rate

👀 If I apply now, can I get the rate I saw today?

Possibly, but even a personalized quote can change before you lock it in because lenders update pricing several times a day as market conditions shift.

» Doing your research? Compare NerdWallet’s best mortgage lenders