Mortgage rates are lower today following the closure of the bond markets for Memorial Day weekend.
The average interest rate on a 30-year, fixed-rate mortgage dropped to 6.46% APR, according to rates provided to BW by Zillow. This is 13 basis points lower than yesterday but six 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.
Average mortgage rates, last 30 days
🤓 From the Nerds: Kate on Rates
📈 What influences mortgage rates?
This week, we’re watching tensions in Iran as new U.S. strikes strain ongoing peace talks. Inflation was already elevated before the war began Feb. 28. Disruptions to oil shipments through the Strait of Hormuz have only added to those pressures. A peace agreement wouldn’t suddenly solve inflation, but it could at least turn down the heat.
On Thursday, we’re watching for the Personal Consumption Expenditures Price Index (PCE) from the Bureau of Economic Analysis, which contains the Federal Reserve’s preferred inflation measure. It’s an important data point ahead of next month’s Fed meeting, which will be the first under incoming Chair Kevin Warsh.
If the PCE shows inflation picking back up, the next Fed meeting could get uncomfortable fast. Minutes from the Fed’s April meeting showed some officials growing more concerned that inflation could linger, raising the possibility that rate hikes may not be completely off the table. Even the hint of another Fed rate hike could be enough to push mortgage rates higher.
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 6.96% 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 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?
It’s important to note that not every buyer’s circumstances will align with the rates provided.
Market factors and individual financial profiles play a significant role in determining the final quote you receive. Even individuals with similar credit scores may end up with different rates based on their overall financial situation.
👀 Can I secure the rate I saw today if I apply now?
While personalized rate quotes are available, they are subject to change until you lock them in. Lenders adjust pricing multiple times a day in response to market fluctuations, so the rate you see today may not be guaranteed until you finalize the application process.