After the release of disappointing employment data, mortgage interest rates are trending lower today.
The average interest rate for a 30-year fixed-rate mortgage has decreased to 6.56% APR, as reported by Zillow to BW. This rate is two basis points lower than yesterday and nine basis points lower than a week ago. This shift is likely influenced by the bleak jobs report released this morning, which showed only 22,000 jobs added in August. The negative outlook on the labor market is expected to prompt a reduction in mortgage rates, supporting the case for a potential interest rate cut by the Federal Reserve at the upcoming meeting on Sept. 16-17.
Looking ahead, inflation data set to be released on Sept. 11 will be a key factor in determining future mortgage rate movements. Depending on the inflation numbers, the Federal Reserve may need to make a decision between prioritizing rate cuts to boost the labor market or rate hikes to combat inflation.
Average mortgage rates, last 30 days
📉 When will mortgage rates drop?
Mortgage rates are constantly changing, influenced by various factors such as inflation reports, job data, Fed meetings, and global news. Even minor fluctuations in the bond market can impact mortgage rates.
The upcoming inflation data release on Sept. 11 will play a significant role in shaping future mortgage rate trends. Depending on the inflation figures, the Federal Reserve will need to make a crucial decision between prioritizing rate cuts to support the labor market or rate hikes to combat inflation.
🏡 Should I start shopping for a home?
The right time to start shopping for a home is when you can comfortably afford a mortgage at the current rates. If the answer is yes, focus on getting preapproved, comparing lender offers, and determining a monthly payment that aligns with your budget.
If purchasing a new home isn’t feasible at the moment, consider paying down existing debts and increasing your down payment savings to strengthen your buyer profile. This not only improves your cash flow for future mortgage payments but also enhances your chances of securing a better interest rate when you’re ready to buy.
Utilize BW’s affordability calculator to estimate your potential monthly payment and plan accordingly for your home purchase.
🔒 Should I lock my rate?
If you’re satisfied with the mortgage quote you’ve received, consider locking in your rate, particularly if your lender offers a float-down option. Rate locks shield you from potential rate increases during the loan processing period, providing peace of mind amidst market fluctuations.
With market conditions constantly changing, securing a rate lock ensures stability and protection against unexpected rate hikes.
🤓 Nerdy Reminder: Mortgage rates can change daily or even hourly. If you’re content with your current deal, don’t hesitate to commit.
🔁 Should I refinance?
Consider refinancing if today’s rates are significantly lower than your current rate, typically by at least 0.5 to 0.75 of a percentage point, and if you plan to remain in your home long enough to recoup closing costs. Given the current rate environment, it may be advantageous to explore refinancing if your existing rate is around 7.06% APR or higher.
When contemplating a refinance, evaluate your objectives: Do you aim to reduce your monthly payment, shorten your loan term, or leverage your home equity for cash? Depending on your goals, you may be more inclined to select a cash-out refinance over a rate-and-term refinance, provided the overall costs are lower than maintaining your original mortgage and acquiring a HELOC or home equity loan.
For those seeking a lower rate, utilize BW’s refinance calculator to estimate potential savings and determine the break-even point for refinancing costs.
🧐 Why is the rate I saw online different from the quote I got?
The advertised rate serves as a sample rate, typically tailored for borrowers with excellent credit, substantial down payments, and willingness to pay for mortgage points. However, individualized quotes vary based on factors such as location, property type, and specific financial profiles.
In addition to external market influences, your personalized rate quote considers specific details like your credit score, property type, and down payment amount, resulting in a customized rate that aligns with your unique circumstances.
👀 If I apply now, can I get the rate I saw today?
While you may receive a rate quote today, keep in mind that rates can fluctuate until you lock in your rate. Lenders adjust pricing regularly in response to market changes, meaning your rate can change until you finalize the lock-in process.