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If you’ve been waiting for lower mortgage rates, today just might be your day.
The average interest rate on a 30-year, fixed-rate mortgage dropped to 6.1% APR, according to rates provided to NerdWallet by Zillow. This is 12 basis points lower than yesterday and two 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.
A significant drop is eye-catching, but bear in mind that you should consider mortgage interest rates’ overall direction, not just what’s going on today. Mortgage rates’ movements over March and April have been primarily driven by U.S. markets’ reactions to what’s going on in Iran. For more on how that works, keep reading below the chart.
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, jobs numbers, Federal Reserve meetings, global news … you name it.
Events in the Iran war have been a key driver for mortgage rates since its onset as investors react to geopolitical uncertainty. But how does an overseas conflict affect what you pay to get a home loan? To sum it up quickly:
⛔ The blockade in the Strait of Hormuz has choked off global oil supply, which raises energy prices and puts upward pressure on inflation.
📈 Inflation fears shake up the bond market. When the dollar’s value erodes, so do bonds’ set returns.
🏠 Mortgage rates tend to follow bond yields. When bond yields go up, so do mortgage rates. That’s why we haven’t seen the average 30-year fixed rate mortgage APR drop below 6% since February.
Some good news: As the conflict drags on, markets aren’t reacting as much to every headline (or social media post) anymore. Lately, we’ve seen mortgage rates stabilize in the low 6% range.
Meanwhile, the Federal Reserve has the tough job of steadying the economy throughout all this turmoil. At its meeting this week, the Fed kept its benchmark interest rate the same in an effort to steady the ship. The Fed doesn’t set mortgage rates, but it indirectly influences which way they tend to move.
Eventually, the Fed will either raise the federal funds rate to curb inflation or cut it to support the job market — signaling mortgage rates’ next move either way. Inflation was already rising before the Iran war, and this week’s data added to that pressure. March’s Personal Consumption Expenditures Index, the Fed’s preferred gauge, showed inflation at 3.2% — the highest in more than two years — underscoring concerns that war-driven energy costs are pushing up everyday prices.
Next week, we’re getting two big data drops on employment that could tip the scales. The Job Openings and Labor Turnover Survey will be released Tuesday, and the Employment Situation report comes Friday. With inflation still above the Fed’s target rate of 2%, signs of a cooling job market could influence how the Fed balances its priorities — and how markets react.
If next week’s data shows a weaker labor market, it could ease some pressure on inflation. In turn, that could improve bond yields and mortgage rates. But that news would come with tradeoffs — a softer job market may help cool price growth, but it also signals a more fragile economic backdrop.
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 6.6% 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 refinancethan 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:
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.
