Mortgage Rates Today, Tuesday, July 28: Mostly Flat

After yesterday’s big jump, mortgage rates are idling where they are until we see the results of tomorrow’s Federal Reserve announcement.

The average interest rate on a 30-year, fixed-rate mortgage fell slightly to 6.73% APR, according to rates provided to NerdWallet by Zillow. This is two basis points lower than yesterday and 31 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.

Analysts are currently split over whether the Federal Reserve will vote to increase overnight borrowing rates when central bankers meet today and tomorrow. When the overnight borrowing rate (called the federal funds rate) goes up, it costs more for lenders to fund mortgages. To avoid losing money on home loan investments, lenders preemptively raise mortgage rates.

As predictions for a rate hike grew louder, mortgage lenders adjusted their rates ahead of the vote to account for the possibility. If the Fed actually votes to hold rates steady, mortgage rates could fall a little in the back half of the week.

Average mortgage rates, last 30 days

📈 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, all eyes are on the Federal Reserve meeting, and futures traders are divided over what policymakers will do. Tomorrow will also bring Federal Reserve Chair Kevin Warsh’s second post-meeting statement, giving markets another chance to gauge his communication style.

Renewed fighting in Iran is once again fanning the flames of inflation by pushing energy prices higher. While expectations for this week’s meeting are somewhat up in the air, analysts are far more certain that rates will be higher in September.

On Thursday, we’ll also get the latest Personal Consumption Expenditures (PCE) index, using data from June. The PCE is the Fed’s preferred measure of inflation, but this report will reflect a calmer period before the Iran ceasefire collapsed in early July. With global oil benchmark prices surging past $100 a barrel last week, June’s inflation picture is already looking dated. That means any inflation relief in the report could prove short-lived.

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 7.23% 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.

🏡 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.

🔒 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.

🧐 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.

👀 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.

About the author

Taylor Getler is a home and mortgages writer for NerdWallet. Her work has been featured in outlets such as MarketWatch, Yahoo Finance, MSN and Nasdaq. Taylor is enthusiastic about financial literacy and helping consumers make smart, informed choices with their money.

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