Mortgage rates crept back up today, but don't read too much into it. The day-to-day movement this week hasn't amounted to much actual change. Today's APR actually matches the average of the daily rates we've seen over the past four days.
The average interest rate on a 30-year, fixed-rate mortgage rose to 6.35% APR, according to rates provided to NerdWallet by Zillow. This is three basis points higher than yesterday and three 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.
Mortgage rates have been rising and falling based on the situation in Iran, as bond markets react to the headlines coming out of the Middle East. Generally, when it looks like the conflict may be abating, rates have fallen. When the news shows aggression intensifying, rates have risen. It's been a mixed bag this week, so mortgage rates' ups and downs would be better characterized as fidgeting rather than any kind of definitive movement.
For more on why the Iran war has had such a strong influence on mortgage rates, plus a deep-dive on what's happening in the U.S. economy, keep reading below the chart.
Average mortgage rates, last 30 days
» Take the next step: Compare mortgage rates from NerdWallet’s top lenders
🤓 From the Nerds: Kate on Rates
📈 What influences mortgage rates?
Mortgage rates are constantly changing, since a major part of how rates are set depends on reactions to new inflation reports, job numbers, Fed meetings, global news ... you name it. For example, even tiny changes in the bond market can shift mortgage pricing.
The war in Iran — or more precisely, U.S. bond markets' reactions to the war in Iran — has been a major mover of mortgage rates since the conflict began. It's less about what exactly is happening overseas and more how that affects things on the homefront, most notably, inflation. To try to distill it into a single sentence, disruptions to oil production and international shipping have throttled supply chains and raised prices, accelerating the rate of inflation.
Last week's Personal Consumption Expenditures price index (PCE) showed that in April inflation reached its worst level since May 2023. Inflation makes life uncomfortable for all of us, but many headlines focused on how uncomfortable it might be about to make one man: Kevin Warsh, the Federal Reserve's new chair.
Even if Warsh successfully shrugs off the president's relentless requests for lower interest rates, the new chair has his own rationale for rate cuts. The thing is, rapid inflation generally means the Federal Reserve needs to raise interest rates, not lower them. Higher borrowing costs are meant to reduce spending and demand, cooling inflation. The Federal Reserve targets a 2% PCE; April's was 3.8%.
This week boasts loads of data on the Fed's other chief concern, employment. (Sustainable inflation and a healthy labor market are the central bankers' recipe for a stable U.S. economy.)
Tuesday brought April Job Openings and Labor Turnover (JOLTS) data from the Bureau of Labor Statistics. JOLTS shows movement in the workforce, with stats on the number of job openings, layoffs and quits. The numbers actually looked pretty good, with job openings beating expectations.
"Job openings are a sort of promise of what may lie ahead," explains Elizabeth Renter, NerdWallet senior economist. "If an employer opens a head count, it could lead to a hire, but that’s not always the case. While the rate of job openings can cast a ray of optimism on the job market, how it translates to actual hiring remains to be seen."
We may already be seeing how things are turning out, thanks to Wednesday's May National Employment Report from payroll administration firm ADP. Though the ADP report only covers private employers, it can provide a preview for the jobs report. ADP came in slightly stronger than expected, implying that some of those April job openings indeed turned into May hires.
Last but extremely not least, I already mentioned the jobs report, and that's coming tomorrow. Technically called the Employment Situation Summary, this data from the Bureau of Labor Statistics gives us, among other measures, the country's official unemployment rate.
If the jobs report looks as good as JOLTS and ADP, sorry Warsh — the case for rate cuts is even weaker. A reasonably healthy job market means the Fed needs to set its sights on curbing inflation.
Even though the Federal Reserve doesn't set mortgage rates, the Fed's actions influence the entire economy. Mortgage rates would likely head lower if it looked like Fed rate cuts were imminent, but if the central bankers are looking to raise rates, well, mortgage rates would probably rise, too.
» Learn more: How the Fed affects mortgage rates
🔁 Should I refinance?
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 may want to start considering a refi if your current rate is around 6.85% or higher.
Also consider your goals: Are you trying to lower your monthly payment, shorten your loan term or turn home equity into cash? For example, you might be more comfortable with paying a higher rate for a cash-out refinance than you would for a rate-and-term refinance, so long as the overall costs are lower than if you kept your original mortgage and added a HELOC or home equity loan.
If you're looking for a lower rate, use NerdWallet's refinance calculator to estimate savings and understand how long it would take to break even on the costs of refinancing.
» Time to refi? Compare refinance rates from NerdWallet’s top lenders
🏡 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 the answer is yes, don’t get too hung up on whether you could be missing out on lower rates later; you can refinance down the road. Focus on getting preapproved, comparing lender offers, and understanding what monthly payment works for your budget.
NerdWallet’s affordability calculator can help you estimate your potential monthly payment. If a new home isn’t in the cards right now, there are still things you can do to strengthen your buyer profile. Take this time to pay down existing debts and build your down payment savings. Not only will this free up more cash flow for a future mortgage payment, it can also get you a better interest rate when you’re ready to buy.
» Is now a good time to buy? See NerdWallet’s analysis
🔒 Should I lock my rate?
If you already have a quote you’re happy with, you should consider locking your mortgage rate, especially if your lender offers a float-down option. A float-down lets you take advantage of a better rate if the market drops during your lock period.
Rate locks protect you from increases while your loan is processed, and with the market forever bouncing around, that peace of mind can be worth it.
🤓 Nerdy Reminder: Rates can change daily, and even hourly. If you’re happy with the deal you have, it’s okay to commit.
» Stay informed: Check out NerdWallet's mortgage news hub for all our latest coverage.
🧐 Why is the rate I saw online different from the quote I got?
The rate you see advertised is a sample rate — usually for a borrower with perfect credit, making a big down payment, and paying for mortgage points. That won't match every buyer's circumstances.
In addition to market factors outside of your control, your customized quote depends on your:
- Credit score
- Debt-to-income ratio
- Employment history
- Down payment
- Type of mortgage
- Location and property type
- Loan amount
Even two people with similar credit scores might get different rates, depending on their overall financial profiles.
» Get the best rate for you: How to get the best mortgage rate
👀 If I apply now, can I get the rate I saw today?
Maybe — but even personalized rate quotes can change until you lock. That’s because lenders adjust pricing multiple times a day in response to market changes.
» Doing your research? Compare NerdWallet’s best mortgage lenders
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