Mortgage Rates Today, Tuesday, February 24: We’re Seeing Fives

Mortgage interest rates saw little movement today, but in the grand scheme of things rates remain the lowest we've seen since September 2022.

The average interest rate on a 30-year, fixed-rate mortgage ticked down to 5.87% APR, according to rates provided to NerdWallet by Zillow. This is one basis point lower than yesterday but 14 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.

If you're seeing "Wow, rates just dropped!" headlines today, that's because more and more sources' rate averages are starting with five, and while the actual distance between 5.99% amd 6.01% is just two basis points, psychologically, it's huge. The last time 30-year fixed-rate mortgage rates started with a five, Harry Styles' "As It Was" was on top of the Billboard charts and the movie Don't Worry Darling was about to premier. That last month for 5% mortgage rates was apparently pretty big for the former One Direction singer.

Coincidentally, Styles' first album since 2022 is set to release next Friday. Not saying he's a harbinger of lower mortgage rates, but it is funny how that lined up. For more on what's actually moving mortgage rates, keep reading below the graph.

» Take the next step: Compare mortgage rates from NerdWallet’s top lenders

📉 When will mortgage rates drop?

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.

If you want to know "when will mortgage rates drop?", guys — they have. If you want to know why they're dropping, that's a much more complicated answer.

Looking at the heavy hitters we usually pay attention to, we've mostly seen evidence that should be pushing mortgage rates higher. The most recent inflation numbers released Feb. 20 showed price pressures accelerating, and minutes from the Federal Reserve's January meeting showed the central bankers heavily divided, with some broaching the possibility of raising rates. The latest jobs numbers weren't terrible, either. Broadly speaking, a weak labor market plus moderate inflation is a recipe for lower rates, while a stronger labor market with faster inflation calls for higher rates. No single piece of data makes a trend, but taken together, we'd probably expect rates to be higher.

Instead, mortgage rates started trending down following earlier inflation data, released Feb. 13, that was better than expected. That rapid response wasn't weird. But the drop lasting, and even deepening, sure is.

Trying to think through what the culprit might be, this morning I decided to look at the secondary mortgage market. The primary mortgage market is consumers taking out home loans. The secondary market is what happens next: Lenders generally sell the loans, using that income to make new loans. The biggest buyers are government-sponsored enterprises Fannie Mae and Freddie Mac, which buy conforming, conventional mortgages (by far the most common loans in the U.S.). Fannie and Freddie bundle comparable loans into mortgage-backed securities, which are investments that act sort of like bonds. The whole process keeps the mortgage market moving.

You might remember that back in January, President Trump ordered a $200BN MBS purchase (you mostly might remember because when that happened, mortgage rates abruptly dropped). This was widely interpreted as a call for Fannie Mae and Freddie Mac to make the purchases, though the actual post didn't specify.

This is such a long way of saying that this morning I decided to look into whether Fannie and Freddie have indeed been buying MBS, and yes, they've been buying billions each month. The purchases have been accelerating, but there wasn't a sharp uptick (though admittedly, the most recent numbers are from December 2025).

Where there was significant acceleration, however, was portfolio holdings — in other words, Fannie and Freddie buying mortgages on the secondary market but then keeping them on their own books. Between January and December 2025, Fannie Mae’s retained mortgage portfolio grew nearly 60%, while Freddie Mac’s mortgage-related investments portfolio rose roughly 43%.

Why would Fannie and Freddie start hanging on to more loans? We could totally speculate on that. But what I'm wondering is whether this could be a key ingredient in why we're seeing lower interest rates now. A strong market for MBS allows mortgage lenders to lower mortgage rates. But a situation where these entities are both buying up MBS and creating fewer MBS (since loans held in portfolio are not being securitized) means strong demand and limited supply.

This could also be one reason we're seeing the mortgage spread narrowing. Mortgage rates are lowkey benchmarked to 10-year Treasury notes, since mortgages behave similarly — even though most home loans have 30-year terms, realistically, most homeowners sell or refinance long before then. Mortgages are slightly riskier investments than the 10Y T-note, since borrowers can end their loans early with a sale or refi, or they can go into default. As such, there's always spread between mortgage rates and the 10YT; mortgage rates are higher to account for the added risk.

But, but, but — if those mortgages are being bought right up, as are MBS, they feel less risky. That means the premium above the 10-year Treasury can shrink, and that's exactly what we're seeing now.

» 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 could start considering a refi if your current rate is around 6.37% 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.

» 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.