Mortgage rates are cooling off as we roll into November. However, they’re still above the 7% threshold.
The average interest rate on a 30-year, fixed-rate mortgage dropped to 7.07% APR, according to rates provided to NerdWallet by Zillow. This is 11 basis points lower than yesterday and 13 basis points lower than a week ago. (See our chart below for more specifics.) A basis point is one one-hundredth of a percentage point.
📈 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.
This week, the Nerds will be watching the October jobs report, which comes out on Friday, Nov. 6. If it shows that employment remained steady (or even improved), that will build a stronger case for the Federal Reserve to raise overnight borrowing rates again at their next meeting on Dec. 8-9.
While the Fed doesn’t directly set mortgage rates, it does set the federal funds rate, which is the fee that banks must pay to borrow from one another (which is how they fund mortgages). Lenders raise mortgage rates any time they think that the federal funds rate is about to go up.
Central bankers hiked the federal funds rate in September, so a relatively steady jobs report would suggest the labor market could withstand higher rates.
The Fed has a dual mandate to control inflation while supporting maximum employment, and raising the federal funds rate is their main tool for bringing inflation down. If they can work to lower inflation without hurting employment too badly, central bankers may feel more confident to act.
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🔁 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 7.57% or higher — but there just aren’t too many people for whom that’s true.
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 refinancethan 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 <a 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:
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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