Mortgage rates dropped today, as markets grow more certain that a Fed rate cut is coming.
The average interest rate on a 30-year, fixed-rate mortgage ticked down to 6.19% APR, according to rates provided to NerdWallet by Zillow. This is eight basis points lower than yesterday and 20 basis points lower than a week ago. (See our chart below for more specifics.) A basis point is one one-hundredth of a percentage point.
That is, to use the technical term, a darn good rate. Lower mortgage interest rates may be the silver lining to the current moment, though if you aren’t trying to buy or refinance a home it probably just looks gray.
Mortgage rates tend to dip when the economy’s looking troubled, and well, just look around. Even in the absence of official government data, a private sector employment report released Wednesday by payroll firm ADP seemed to convince many that the Federal Reserve will need to cut rates later this month. Lower interest rates are the Fed’s best shot at shoring up a sagging labor market.
P.S.: 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
📉 When will mortgage rates drop?
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.
Usually, the Nerds are looking ahead to a big data drop. But because of the government shutdown, info we’d expect to arrive shortly — like the CPI report scheduled for Oct. 15 — is in limbo. We’ve already missed the jobs report that was slated for Oct. 3. Those official numbers are helpful for future projections, since they can provide clues to the Federal Reserve’s likely moves; after all, data is vital to the Fed’s decision making.
In case that’s not enough pressure, the Federal Reserve’s next meeting is at the end of this month and the central bankers are at a pivotal moment, having just cut rates in September. For now, we’ll be keeping a close eye on the markets — as will the Fed.
The Federal Reserve won’t shut down, because it doesn’t rely on government funding. The Fed will still be affected, however, because its decision making relies heavily on government data.
🏡 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.
🔁 Should I refinance?
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 6.69% 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 refinance than 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.
🧐 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:
Location and property type
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.
