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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 BW 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?
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⛔ The blockade in the Strait of Hormuz has choked off global oil supply, which raises energy prices and puts upward pressure on inflation.
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📈 Inflation fears shake up the bond market. When the dollar’s value erodes, so do bonds’ set returns.
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🏠 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.
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.
🏡 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.
🔒 Should I lock my rate?
Rate locks provide protection against rate increases while your loan is being processed, offering peace of mind in a fluctuating market.
🤓 Nerdy Reminder: Mortgage rates can fluctuate daily and even hourly. If you are happy with the terms of your current deal, it is advisable to secure it.
🧐 Why is the rate I saw online different from the quote I received?
In addition to external market factors beyond your control, the personalized quote you receive is influenced by factors such as:
Even individuals with similar credit scores may receive different rates based on their overall financial profiles.
👀 Can I secure the rate I viewed online today by applying now?
Possibly, but even personalized rate quotes can change until you lock them in. Lenders adjust pricing multiple times a day in response to market fluctuations.