If you’ve been holding out for lower mortgage rates, today could be your lucky day.
The average interest rate on a 30-year fixed-rate mortgage has fallen to 6.35% APR, based on rates provided to BW by Zillow. This marks a decrease of 13 basis points from yesterday, although it is still three basis points higher than a week ago. (Refer to our chart below for more detailed information.) A basis point equals one one-hundredth of a percentage point.
While a significant drop in rates is attention-grabbing, it’s important to consider the overall direction of mortgage interest rates rather than just the current moment. That being said, if you’re pleased with the current rates, it might be time to take your home search seriously or start analyzing the numbers for a potential refinance.
Although the economy operates continuously, market activity is typically paused on weekends. Therefore, the rates you observe on Friday are unlikely to change significantly (if at all) until Monday.
Average mortgage rates over the past 30 days
📉 When can we expect mortgage rates to decrease?
Mortgage rates are constantly fluctuating as they are influenced by various factors such as reactions to new inflation reports, job figures, Federal Reserve meetings, global events, and more. For instance, even minor changes in the bond market can impact mortgage pricing.
This week, we are keeping an eye on the September jobs report, scheduled for release by the Bureau of Labor Statistics on October 3. We anticipate that if the job numbers are weaker, this could lead to a decrease in rates, as it would strengthen the case for the Federal Reserve‘s decision to lower the federal funds rate at their upcoming meeting. Conversely, if the labor market demonstrates unexpected strength, rates may rise as the path forward for central bankers becomes more uncertain.
🏡 Is it time to begin house hunting?
There isn’t a universal “perfect” time to start searching for a home — what’s crucial is whether you can comfortably manage a mortgage at today’s rates.
If the answer is affirmative, don’t dwell too much on the possibility of missing out on lower rates in the future; remember that you can always refinance later on. Focus on getting preapproved, comparing offers from different lenders, and determining a monthly payment that aligns with your budget.
BW’s affordability calculator can assist you in estimating your potential monthly payment. If purchasing a new home isn’t feasible at the moment, there are still steps you can take to enhance your buyer profile. Consider paying off existing debts and boosting your down payment savings. This not only frees up more cash flow for future mortgage payments but can also secure you a better interest rate when you’re ready to make a purchase.
🔒 Should I lock in my rate?
If you have received a rate quote that you are satisfied with, it may be wise to consider locking in your mortgage rate, especially if your lender offers a float-down option. A float-down feature allows you to take advantage of a lower rate if the market experiences a drop during your lock-in period.
Rate locks shield you from rate increases while your loan is being processed, and given the market’s constant fluctuations, this peace of mind can be invaluable.
🤓 Nerdy Tip: Rates can change daily, and even hourly. If you are content with the offer you have, it’s perfectly fine to make a commitment.
🔁 Is refinancing a good idea?
Refinancing could be beneficial 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 remain in your home long enough to recoup the closing costs).
Given the current rate environment, you might want to start contemplating a refinance if your existing rate is approximately 6.85% or higher.
Also, factor in your objectives: Are you aiming to reduce your monthly payment, shorten your loan duration, or convert home equity into cash? For instance, you might be more inclined to accept a higher rate for a cash-out refinance as opposed to a rate-and-term refinance, as long as the overall costs are lower than if you retained your original mortgage and added a HELOC or home equity loan.
If you are seeking a lower rate, utilize BW’s refinance calculator to estimate potential savings and comprehend the time it would take to recover the refinancing costs.
🧐 Why does the rate I viewed online differ from the quote I received?
The rate advertised is typically a sample rate — usually for a borrower with excellent credit, making a substantial down payment, and paying for mortgage points. This may not align with every buyer’s circumstances.
In addition to external market factors, your personalized quote is influenced by:
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Location and property type
Even individuals with similar credit scores may receive different rates based on their overall financial profiles.
👀 If I apply now, can I secure the rate I viewed today?
It’s possible — but even personalized rate quotes can change until you lock in. Lenders adjust pricing multiple times a day in response to market movements.