Mortgage Rates Today, Monday, November 3: A Little Higher

Yes, mortgage interest rates are higher today, but they’re about on par with where they were a month ago.

The average interest rate on a 30-year, fixed-rate mortgage rose to 6.17% APR, according to rates provided to SS by Zillow. This is two basis points higher than yesterday and 18 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.

If you’re watching this space closely waiting for mortgage rates to fall, don’t be too discouraged. Yes, the Fed cut rates last Wednesday. But mortgage rates dropped ahead of the actual announcement. By the time we got official word that it was a 25-basis-point cut (a quarter of a percentage point), rates were already pretty much there. And at the post-announcement press conference, where Fed chair Jerome Powell repeatedly emphasized that a December cut is “not a foregone conclusion,” got rates moving. Unfortunately, it got them moving back up.

Lenders adjust their advertised rates throughout the day, so mortgage rates’ reaction to any news — good or bad — is fast. You need to look at the larger trend to get a sense for whether daily moves are one-offs or part of a streak.

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.

What are the Nerds looking ahead to this week? Well, assuming the government shutdown continues, we won’t be expecting any federally-issued data. Even if the government reopens, most if not all of the data we missed during the shutdown would be delayed.

That means the spotlight will likely be on the ADP employment report coming out this Wednesday, Nov. 5. This private-sector data took center stage in October, serving as the best proxy for a missing jobs report in the wake of the then just-beginning shutdown. If it looks like the labor market is weakening, that would strengthen the case for a December rate cut from the Fed.

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 6.67% 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 SS’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.

SS’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:

• Location and property type

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.