Mortgage Rates Today, Wednesday, January 21: Flat, Still Close to 6%

Mortgage rates remained relatively stable compared to yesterday.

The average interest rate on a 30-year, fixed-rate mortgage slightly decreased to 6.09% APR, as reported by Zillow to BW. This rate is one basis point lower than yesterday and 15 basis points higher than a week ago. (Refer to the chart below for more detailed information.) A basis point equals one one-hundredth of a percentage point.

Throughout the month, rates have been hovering around 6%, fluctuating within a range of 10 basis points. If the current rates fit within your budget, now might be a good time to explore mortgage options or consider refinancing.

Mortgage rates experience constant fluctuations, influenced by reactions to new inflation data, job reports, Federal Reserve meetings, global events, and more. Even minor changes in the bond market can impact mortgage rates.

This week, attention is focused on the upcoming release of the Personal Consumption Expenditures Index (PCE). The PCE serves as a crucial gauge of inflation, a key factor considered by the Federal Reserve when determining overnight borrowing rates. (These rates affect the interest rates set by banks for home loans.)

While the recent government shutdown may seem like a distant memory, there are still delays in government data reporting. The upcoming PCE report for November will provide valuable insights despite being slightly outdated, helping to fill in the gap on recent trends.

The most recent review of inflation — the December Consumer Price Index (CPI) report released on January 13 — indicated a gradual moderation in inflation rates. Prices rose by 2.7% over the past 12 months, a rate similar to the previous month but slightly above the Fed’s 2% target rate.

With a week left until the Fed meeting, analysts predict that central bankers will opt to maintain current rates. Any discussions by the Fed are likely to include considerations of new risks to the Fed’s independence, following Justice Department subpoenas involving Federal Reserve Chair Jerome Powell earlier this month.

Consider refinancing if today’s rates are at least 0.5 to 0.75 percentage points lower than your current rate (and if you plan to remain in your home long enough to recoup closing costs).

Given the current rate environment, it may be wise to explore refinancing options if your existing rate is approximately 6.59% or higher.

Additionally, define your objectives: Do you aim to reduce monthly payments, shorten the loan term, or leverage home equity for cash? For instance, you might be more inclined to accept a higher rate for a cash-out refinance than for a rate-and-term refinance, as long as the overall costs are lower than retaining your original mortgage and adding a HELOC or home equity loan.

For those seeking a lower rate, BW’s refinance calculator can help estimate savings and determine the time needed to offset refinancing costs.

The crucial factor is whether you can comfortably manage a mortgage at today’s rates. If the answer is affirmative, focus on getting preapproved, comparing lender offers, and determining a monthly payment that aligns with your financial plan.

Use BW’s affordability calculator to gauge your potential monthly payment. If purchasing a new home isn’t immediate, take steps to strengthen your buyer profile by paying off existing debts and increasing your down payment savings. Not only will this boost your cash flow for future mortgage payments, but it could also secure a better interest rate when you’re ready to buy.

If you’re content with a provided quote, consider locking in your mortgage rate, especially if your lender offers a float-down option. A float-down arrangement allows you to benefit from a lower rate if the market shifts during your lock-in period.

Rate locks shield you from rate hikes while your loan application progresses, offering peace of mind amidst the market’s constant fluctuations.

The advertised rate serves as a generalized rate — typically aimed at borrowers with excellent credit, substantial down payments, and willingness to pay for mortgage points. This may not align with every individual’s financial situation.

In addition to external market factors, your customized quote is influenced by:

• Location and type of property

Even individuals with similar credit scores may receive different rates based on their overall financial profiles.

Possibly — but even personalized rate estimates can fluctuate until you lock in. Lenders adjust rates multiple times daily in response to market shifts.