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Mortgage rates continued to ride the seesaw they’ve been on all week, rising and falling with what’s happening in the Iran war. Though rates moved decidedly higher this morning, it might only take a single positive headline to get them easing back down.

The average interest rate on a 30-year, fixed-rate mortgage rose to 6.46% APR, according to rates provided to NerdWallet by Zillow. This is 11 basis points higher than yesterday and four 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.

Lately mortgage rates’ movements have been driven by 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.

P.S.: While the economy never sleeps, markets are closed on the weekends. The rates you see Friday are unlikely to change much (if at all) until Monday.

Average mortgage rates, last 30 days

🤓 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 we got an abundance of data covering 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, though separations — people leaving jobs, voluntarily or not — weren’t great.

A job opening doesn’t necessarily equal a new hire, but Wednesday’s May National Employment Report from payroll administration firm ADP helped put a more positive spin on April JOLTS. ADP came in slightly stronger than expected, implying that some of those April job openings indeed turned into May hires.

And this morning we got May’s Employment Situation Summary, better known as the jobs report. This data from the Bureau of Labor Statistics gives us, among other measures, the country’s official unemployment rate.

Unemployment was unchanged in May, as predicted, but the number of jobs added was considerably over market estimates: 172,000 versus the expected 88,000. “The narrative for the past year or so has been a cooling labor market,” says Elizabeth Renter, NerdWallet senior economist. “We’ve been waiting for some kind of movement while hanging out in a more stagnant, low-hire, low-fire environment. This most recent data makes a good case that the cooling has indeed stopped.”

With all of this data implying the U.S. labor market is finding its footing, 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.

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 6.96% 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

Kate Wood is a lending expert and certified financial health counselor (CHFC) who joined NerdWallet in 2019. With an educational background in sociology, Kate feels strongly about issues like inequality in homeownership and higher education, and relishes any opportunity to demystify government programs. Prior to NerdWallet, she wrote about home remodeling, decor and maintenance for This Old House.

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