Mortgage rates continue to yo-yo as lenders adjust and then re-adjust expectations for what the Federal Reserve will do at its meeting three weeks from now.
The average interest rate on a 30-year, fixed-rate mortgage dropped to 6.22% APR, according to rates provided to NerdWallet by Zillow. This is 10 basis points lower than yesterday but nine 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.
Since economists are missing weeks of federal data thanks to the shutdown, analysts are paying close attention to what central bankers are saying in order to set rate expectations. Yesterday, Fed governor Christopher Waller voiced concern for the labor market and said that he was in favor of a December cut. This might be one reason rates are a little lower today.
📉 When will mortgage rates drop?
The government shutdown may be over, but we’ll be feeling its effects on economic reporting for a long time. The shutdown kept the Bureau of Labor Statistics (BLS) from gathering vital inflation and unemployment data, which are two main elements that the Federal Reserve considers when setting monetary policy. The next Fed meeting is Dec. 9-10.
Some analysts were hopeful that we’d somehow get retroactive data once the shutdown was over, but White House Press Secretary Karoline Leavitt told reporters last Wednesday that October CPI and jobs reports will likely never be released.
“All of that economic data released will be permanently impaired,” she said, “leaving our policymakers at the Fed flying blind at a critical period.”
This means that even though the federal government has reopened, economists may still have to rely on alternative data sources (not to be confused with “alternative facts”) for guidance.
This week, the Nerds will be watching the National Association of Realtors’ Existing Home Sales Report, which measures sales and prices of existing single-family homes for October.
It’s also likely that BLS will publish a weekly jobless claims report on Thursday, which it has not been able to do since Sept. 25. Multiple Fed presidents are also scheduled to speak throughout the week, which could provide additional insight into how central bankers are weighing unemployment and inflation.
🔁 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 may want to start considering a refi if your current rate is around 6.72% 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.
🔒 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.
🧐 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:
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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.
