rewrite this title Mortgage Rates Today, Wednesday, June 3: Lower, But … – NerdWallet

Mortgage rates dropped today, but the fall only erased yesterday’s jump: We are right back where we were on Monday. It’s not a huge surprise given the state of the Iran war, which has had a strong influence on mortgage interest rates since its onset. Lately, whether you see rates described as higher or lower can depend on when during the day you check them, as seemingly contradictory events pull rates in different directions.

Yesterday Secretary of State Marco Rubio told a Senate committee that the Iran war is “over.” This is the kind of news that tends to calm markets and send mortgage rates down. Also yesterday, the U.S. carried out “self-defense strikes;” this morning, Iran retaliated. This type of news generally does the opposite.

All of that’s to say that the average interest rate on a 30-year, fixed-rate mortgage dropped to 6.32% APR, according to rates provided to NerdWallet by Zillow. This is 10 basis points lower than yesterday and 11 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.

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.

🤓 From the Nerds: Kate on Rates

Yesterday morning 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 this morning’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 on Friday. 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.

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 6.82% or higher.

There is no universal “right” time to start shopping — what matters is whether you can comfortably afford a mortgage now at today’s rates.

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.

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.

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.