Mortgage Rates Today, Tuesday, December 9: A Little Lower

It’s not a big enough dip to really make a difference, but mortgage interest rates are lower today.

The average interest rate on a 30-year, fixed-rate mortgage ticked down to 6.11% APR, according to rates provided to NerdWallet by Zillow. This is five basis points lower than yesterday and unchanged from a week ago. (See our chart below for more specifics.) A basis point is one one-hundredth of a percentage point.

Though this wasn’t much of a move, if you’re shopping for a home or thinking about refinancing, this might be a sign to start following rates a bit more closely. Even if rates aren’t necessarily going down each day, you might feel more ready to make your move if the overall trend is downward.

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.

Usually when we’re this close to a meeting, markets have fully made up their minds about whether the Fed will raise, lower or maintain the federal funds rate. But thanks to this fall’s government shutdown disrupting federal agencies’ data collection, the central bankers are working with considerably less information than usual. On top of that, the Fed governors haven’t been in sync lately, with some calling for a cut and others espousing caution in public remarks.

Lackluster November employment data released last week by payroll services company ADP bolstered the case for a cut. But inflation data from the Department of Commerce on Friday showed the rate of inflation holding steady. Fed governors who already think inflation’s running too hot could use this to argue against a rate cut.

This morning, the central bankers got one more key piece of info before their announcement. The Bureau of Labor Statistics Job Openings and Labor Turnover (better known as JOLTS) data for October shows that the labor market is still hanging on, with low hiring but also low quits. With not much moving in the job market, most forecasters expect the Fed to cut rates by 25 basis points this week to help boost employment.

Mortgage rates aren’t likely to have a huge reaction to the Fed’s decision, but we could see bigger moves based on the additional info we’ll get tomorrow:

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 6.61% 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.

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.

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.

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.

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.