Mortgage Rates Today, Monday, November 2: Noticeably Lower

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.This week’s employment data could potentially push mortgage rates one way or the other — more on that below the graph.Average mortgage rates, last 30 days🤓 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.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.The September Personal Consumption Expenditures price index (PCE), the Fed’s preferred inflation gauge, was released last Thursday. The data shows inflation was 3.6% year-over-year in September, up from 3.4% in August.September’s federal funds rate hike came in the middle of the month, so October’s inflation data will really capture its effect on inflation. The October PCE report will come out on Nov. 25.Explore mortgages today and get started on your homeownership goalsGet personalized rates. Your lender matches are just a few questions away.Do you want to purchase or refinance?What's your property type?How do you plan to use this property?Won't affect your credit score🔁 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 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:Credit scoreDebt-to-income ratioEmployment historyDown paymentType of mortgageLocation and property typeLoan amountEven 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.