Mortgage Rates Edge Higher Again After Last Week's Drop

After a sharp decline late last week, mortgage rates have moved higher once more.

The average rate on a 30-year fixed mortgage rose to 7.20% APR, according to Zillow rates shared with NerdWallet. That is 12 basis points above the previous day and three basis points below the level from a week earlier. A basis point equals one-hundredth of a percentage point.

Rates eased recently after developments in the tech and AI sectors, and a busy stretch of economic reports and policy meetings could keep lenders adjusting their pricing as they assess broader conditions in the days ahead.

Average mortgage rates over the past 30 days

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🤓 Kate on Rates

📈 What moves mortgage rates?

Mortgage rates shift constantly because they are influenced by inflation data, employment numbers, central bank meetings, global events and other market forces. Even small moves in the bond market can affect mortgage pricing.

Recently, rates fell as investor concern about whether major tech firms will be able to turn a profit from AI pushed money toward safer assets such as Treasuries. Greater demand for Treasury bonds lifted prices and lowered yields. Because mortgage rates are generally tied to the 10-year Treasury yield, mortgage rates also dropped.

Why are investors uneasy about AI? A major factor is inflation. Tech companies have borrowed heavily, often through corporate bonds, to finance AI expansion.

When prices rise, the cost of building data centers and other AI infrastructure rises too. To earn strong returns and repay bondholders, tech companies will need to generate substantial profits, and that has left some investors questioning the outlook.

Inflation is a major focus this week. The Federal Open Market Committee is set to meet, and although the Fed is not expected to change the funds rate at this meeting, its view on inflation will matter. Markets will also watch the post-meeting press conference closely for clues about the central bank’s next move.

Later in the week, new inflation data from the Bureau of Economic Analysis will offer another look at price trends, even if the figures arrive too late to influence the meeting itself.

What that means for mortgage rates is less clear.

On one hand, stronger inflation often pushes rates higher because bonds become less appealing to investors and the Fed becomes more likely to raise rates. The Federal Reserve does not set mortgage rates directly, but changes in the federal funds rate tend to ripple through the economy and affect home loan pricing.

On the other hand, continued inflation worries may keep investors focused on bonds, which could push Treasury yields — and mortgage rates — 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 rate, provided you plan to stay in the home long enough to recover closing costs.

At present rate levels, a refinance may start to make sense if your current mortgage rate is around 7.7% or higher, although that applies to relatively few borrowers.

It also helps to think about your goals. Are you trying to reduce your monthly payment, shorten your loan term or tap home equity for cash? In some cases, a cash-out refinance with a slightly higher rate may still be preferable if it costs less overall than keeping the current mortgage and adding a HELOC or home equity loan.

If you want a lower rate, use NerdWallet's refinance calculator to estimate savings and see how long it could take to break even on refinancing costs.

🏡 Should I start shopping for a home?

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

If you can, don’t worry too much about the possibility of lower rates later; refinancing is always an option down the line. Focus instead on getting preapproved, comparing lender offers and finding a monthly payment that fits your budget.

NerdWallet’s affordability calculator can help estimate your monthly payment. If buying a home is not realistic right now, there are still ways to prepare. Paying down debt and building savings for a down payment can improve cash flow and may 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 rate you like, locking it may be a smart move, especially if your lender offers a float-down option. A float-down can let you benefit from a lower rate if the market improves during the lock period.

Rate locks protect you from increases while your loan is being processed, and that stability can be valuable when markets are volatile.

🤓 Nerdy Reminder: Rates can change daily, and even hourly. If you’re happy with the offer, it may be worth locking in.

» 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?

The rate advertised online is usually a sample rate, often based on a borrower with excellent credit, a large down payment and purchased mortgage points. That will not match every buyer’s situation.

Along with market conditions beyond your control, your personal 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 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 personalized quotes can change before you lock. Lenders often reprice loans several times a day as market conditions shift.

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