Mortgage Rates Ease, but Stay Above 7%

Mortgage rates have edged lower as November begins, but they remain above the 7% mark.

The average rate on a 30-year fixed mortgage fell to 7.07% APR, according to Zillow rates shared with NerdWallet. That is 11 basis points below the previous day and 13 basis points lower than a week earlier. A basis point equals one-hundredth of a percentage point.

Incoming employment data this week could move rates in either direction, as explained below.

Average mortgage rates, last 30 days

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

🤓 Kate on Rates

📈 What drives mortgage rates?

Mortgage rates change constantly because they are shaped by reactions to inflation reports, labor data, Federal Reserve meetings, global events and more. Even small moves in the bond market can affect mortgage pricing.

This week, attention will be on the October jobs report. If it shows employment holding steady or improving, that could strengthen the case for the Federal Reserve to raise overnight borrowing rates at its next meeting in December.

Although the Fed does not directly set mortgage rates, it does control the federal funds rate, which is the cost banks pay to borrow from one another and a key factor in mortgage funding. Lenders often raise mortgage rates when they expect the federal funds rate to increase.

The central bank raised the federal funds rate in September, so a stable jobs report would suggest the labor market can handle higher borrowing costs.

The Fed’s mandate is to keep inflation under control while supporting maximum employment, and increasing the federal funds rate is one of its main tools for reducing inflation. If policymakers believe inflation can cool without causing major damage to jobs, they may be more willing to act.

The latest Personal Consumption Expenditures price index, the Fed’s preferred inflation measure, showed inflation at 3.6% year over year in September, up from 3.4% in August.

Because the September rate hike happened in the middle of the month, October’s inflation data should provide a clearer picture of its effect. The October PCE report is due later in the month.

» Learn more: How the Fed affects mortgage rates

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🔁 Should I refinance?

Refinancing may make sense if current rates are at least 0.5 to 0.75 percentage point below your existing rate, and if you expect to stay in the home long enough to recover closing costs.

At today’s level, a refinance may be worth exploring if your current mortgage rate is around 7.57% or higher, though relatively few borrowers are in that position.

It also helps to consider your goal: lowering the monthly payment, shortening the loan term or turning home equity into cash. For instance, you may be more willing to accept a higher rate for a cash-out refinance than for a rate-and-term refinance, as long as the total cost is still lower than keeping the original mortgage and adding a HELOC or home equity loan.

If you want a lower rate, NerdWallet’s refinance calculator can help estimate savings and show how long it may take to break even on refinancing costs.

🏡 Should I start shopping for a home?

There is no single right time to begin house hunting. What matters most is whether you can comfortably afford a mortgage at current rates.

If you can, don’t focus too much on whether rates might fall later; you can always refinance in the future. Instead, concentrate on getting preapproved, comparing lender offers and figuring out what monthly payment fits your budget.

NerdWallet’s affordability calculator can help estimate a possible monthly payment. If buying a home is not realistic right now, there are still ways to strengthen your financial position. Use the time to pay down debt and build savings for a down payment. That can improve cash flow later and may also help you qualify for a better rate when you are ready to buy.

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

🔒 Should I lock my rate?

If you already have a quote you like, it may be wise to lock in your mortgage rate, especially if your lender offers a float-down option. A float-down allows you to benefit from a lower rate if the market falls during the lock period.

Rate locks shield you from increases while your loan is being processed, and that stability can be valuable in a volatile market.

🤓 Nerdy Reminder: Rates can change daily, and even hourly. If you’re satisfied with the offer, it can make sense to lock it in.

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

🧐 Why is the online rate different from my quote?

The rate advertised online is usually a sample rate for a borrower with excellent credit, a large down payment and mortgage points. That won’t match every buyer’s situation.

Beyond market forces outside your control, a personalized quote depends on your:

• 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 may receive different rates depending 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. Lenders update pricing several times a day as market conditions shift.

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