After climbing all week, mortgage rates eased today — though in a high-rate environment, it’s not much of a drop.
The average interest rate on a 30-year, fixed-rate mortgage ticked down to 7.41% APR, according to rates provided to BW by Zillow. This is three basis points lower than yesterday but 27 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.
Meanwhile, this morning, we got fresh jobs data for September from the Bureau of Labor Statistics. Employers added fewer jobs than expected and the unemployment rate ticked up to 4.2%, signaling weakness in the labor market. Coupled with softer-than-expected inflation data in August’s Personal Consumption Expenditures index, it’s looking less likely that the Federal Reserve will hike its benchmark rate in October.
“The data was also enough to slow the bond market’s roll, at least for a moment, so we’ll likely see slightly softer mortgage rates,” says Kate Wood, lending expert at BW. “But think dip, not dive — and mortgage rates have already risen so much this week that honestly it’s unlikely to even be that much of a dip.”
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
🤓 Kate on Rates: October 1, 2026
📈 What influences mortgage rates?
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.
Lately, mortgage rates have remained steadily above 7% as inflation puts upward pressure on financial markets. Mortgage interest rates tend to track the yield on the 10-year Treasury note — essentially, the return investors demand for lending money to the U.S. government. This week, that yield hit its highest level since 2002.
The larger forces spooking the bond market, like U.S. government borrowing and big tech’s spending spree on AI and data centers, aren’t going away anytime soon. Meanwhile, the war in Iran continues to strain global oil supplies, keeping inflation pressure — and mortgage rates — high.
In an effort to tame inflation, the Federal Reserve raised its benchmark rate by 25 basis points at its September meeting. The Fed doesn’t set mortgage rates, but financial markets watch closely for clues about its next move. But the Fed doesn’t focus on inflation alone. The central bankers must balance efforts to cool price growth with keeping the labor market strong and healthy.
The Fed’s prescription is usually rate hikes to fight inflation, or rate cuts to stimulate employment. Right now, those forces are at odds. Since inflation is still high and September’s jobs data came in weaker than expected, the Fed will likely keep its benchmark rate unchanged at the October 27-28 meeting. Public comments from Fed officials next week could signal what the central bankers are thinking.
For mortgage borrowers, expectations that the Fed will hold rates steady could bring a little short-term relief. But don’t expect a dramatic drop: The larger forces pushing up long-term borrowing costs aren’t likely to ease soon. If you’re shopping now, build your budget around today’s higher rates — and treat any dip as a welcome bonus, not a guarantee.
And if you’ve been hoping to refinance … well, patience is a virtue. 😬
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