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Mortgage interest rates are higher today on the heels of hot new inflation data.
The average interest rate on a 30-year, fixed-rate mortgage rose to 6.23% APR, according to rates provided to NerdWallet by Zillow. This is six basis points higher than yesterday and eight basis points higher than a week ago. (See our chart below for more specifics.) A basis point is one one-hundredth of a percentage point.
While rising rates can be discouraging, it’s not worth it to try and time the market. If you can afford rates where they are today, don’t be afraid to start shopping — you can always refinance later if rates come down.
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.
This week, we’re continuing to keep a close watch on the headlines coming out of the Middle East, as the war in Iran — or more precisely, the U.S. bond markets’ reactions to the war in Iran — has been a key driver of mortgage rates since its inception. But there’s news coming in closer to home, too.
This morning, the Bureau of Labor Statistics released the latest Consumer Price Index (CPI). Inflation has been a hot topic lately, since the Iran war has been driving up costs on the home front. This CPI report showed that inflation spiked to its highest level in nearly three years in April, reaching 3.8%. This indicates that the effects of the war have really begun to ripple across the economy; comparatively, inflation rose just 3.3% in March.
This could set the stage for a potentially contentious Federal Reserve meeting next month. Incoming chair Kevin Warsh could be confirmed as soon as this week, and he’s made no secret of his rationale for lowering interest rates. But cutting rates in an economy where inflation’s running hot and employment’s doing just fine will be a tough sell, especially with three Fed governors dissenting in April because of their inflation concerns.
If markets begin anticipating that the Fed could raise interest rates, that could put upward pressure on mortgage rates, too.
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 may want to start considering a refi if your current rate is around 6.73% 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.
🏡 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.
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.
About the author
Taylor Getler is a home and mortgages writer for NerdWallet. Her work has been featured in outlets such as MarketWatch, Yahoo Finance, MSN and Nasdaq. Taylor is enthusiastic about financial literacy and helping consumers make smart, informed choices with their money.
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