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Mortgage rates went up today as the Iran war and resulting inflation continues to rattle financial markets.
The average interest rate on a 30-year, fixed-rate mortgage rose to 6.22% APR, according to rates provided to BW by Zillow. This is nine basis points higher than yesterday and 12 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, tensions in the Middle East drag on with no end in sight. A blockade in the Strait of Hormuz has disrupted oil flows, pushing today’s crude prices to their highest since the war began. As a result, concerns about inflation are intensifying. Inflation tends to lift bond yields and, in turn, mortgage costs.
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.
Average mortgage rates, last 30 days
📉 When will mortgage rates drop?
“Goods inflation, which includes gas, drove the bulk of the increase in March, but transportation services also quickened, suggesting that some of these services could be pricing in elevated oil prices too,” says Elizabeth Renter, BW Senior Economist.
Inflation fears are what’s been messing with the bond market, since when the dollar’s value erodes, so do bonds’ set returns. Ironically though, if it looks like inflation’s really setting in, that could end up good for mortgage rates — though not so good for everything else.
In that environment, we’d be more likely to see lower mortgage rates, as Federal Reserve policy would likely shift to rate cutting to encourage spending. But all of that would be a hefty price to pay for lower mortgage interest rates.
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 6.72% 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.
If purchasing a new home is not currently feasible, there are still steps you can take to enhance your buyer profile. Use this time to reduce existing debts and increase your down payment savings. This not only frees up more cash flow for a future mortgage payment but also improves your chances of securing a better interest rate when you are ready to buy.
If you have received a mortgage rate quote that you are satisfied with, it may be a good idea to consider locking in that rate, especially if your lender offers a float-down option. A float-down allows you to take advantage of a lower rate if the market changes during your lock period. Rate locks provide protection against rate increases while your loan is being processed, offering peace of mind in a fluctuating market.
It is common for the rate advertised online to be a sample rate based on ideal borrower circumstances, such as perfect credit, a large down payment, and payment for mortgage points. Your personalized quote will depend on various factors, including your credit score and financial profile, which can differ from another person with a similar credit score.
Even if you apply for a mortgage now, the rate you saw today may change until you lock it in. Lenders adjust pricing multiple times a day in response to market fluctuations, so it is important to be prepared for potential rate adjustments until you secure a rate lock.
About the author:
Abby Badach Doyle has been writing about homeownership and mortgages for BW since 2022. Her work has been featured in outlets including The Associated Press, The Washington Post, and The Seattle Times. Abby is dedicated to simplifying the homebuying process, especially for first-time buyers, through interactive tools and practical advice.
As a reporter, Abby is interested in exploring innovative housing solutions and sharing personal stories about how homeownership fosters community and a sense of belonging. In addition to her work in personal finance, Abby is a musician, songwriter, and producer who understands the challenge of balancing creative passion with financial stability. She produced a special episode of BW’s “Smart Money” podcast in 2024 on managing income fluctuations in a creative career.
Based in Pittsburgh, Abby enjoys playing the fiddle, raising chickens, and tending to her garden at her urban homestead when she is not writing about personal finance.