Today, mortgage interest rates decreased due to positive news indicating that Iran is considering a U.S. peace deal that could end the war. The average interest rate on a 30-year fixed-rate mortgage is now at 6.4% APR, as reported by Zillow to BW. This rate is 10 basis points lower than yesterday but one basis point higher than a week ago.
The ongoing events in the Iran war have been a major factor influencing mortgage rates. Until a lasting peace agreement is reached, we can expect to see fluctuations in mortgage rates as investors react to geopolitical uncertainties. Factors such as rising oil prices leading to inflation, which in turn affects bond yields and mortgage costs, are also at play.
Mortgage rates are constantly changing based on various factors such as new inflation reports, job numbers, Fed meetings, and global news. Even minor shifts in the bond market can impact mortgage pricing. The upcoming release of the Personal Consumption Expenditures Price Index (PCE) on May 28 is anticipated to influence mortgage rates as it contains the Federal Reserve’s preferred inflation measure.
With the current rates, refinancing may be a viable option for those with rates higher than 6.9%. Consider your goals, whether it’s to lower monthly payments, shorten the loan term, or tap into home equity. BW’s refinance calculator can help estimate savings and determine the break-even point for refinancing costs.
If you’re considering buying a home, focus on affordability at current rates rather than waiting for potentially lower rates in the future. Strengthen your buyer profile by paying down debts and saving for a down payment. BW’s affordability calculator can assist in estimating monthly payments.
For those already with a favorable mortgage rate, locking it in may be a wise decision, especially if the lender offers a float-down option to benefit from a better rate if the market improves during the lock period. Remember that rates can change frequently, so committing to a deal you’re satisfied with is advisable. It’s important to note that not every buyer’s circumstances will align perfectly with the rates you see. Market factors and individual financial profiles play a significant role in determining the customized quote you receive. Even individuals with similar credit scores may end up with different rates based on their overall financial situation.
If you’re wondering whether the rate you see today will still be available when you apply, the answer is maybe. Rate quotes can fluctuate until you officially lock in your rate, as lenders adjust pricing multiple times a day in response to market changes.
About the author
Abby Badach Doyle has been writing about homeownership and mortgages for BW since 2022. Her work has been featured in various outlets, including The Associated Press, The Washington Post, and The Seattle Times. Abby is dedicated to helping make the homebuying journey less stressful, especially for first-time buyers. She is passionate about innovative housing solutions and the role homeownership plays in building community and a sense of belonging.
In addition to her writing, Abby is a musician, songwriter, and producer who understands the balance between creative fulfillment and financial stability. She produced a special episode of BW’s “Smart Money” podcast in 2024 on navigating income swings 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’s not writing about personal finance.