Mortgage Rates Today, Tuesday, December 16: Fairly Flat

Mortgage rates were essentially stable today, but significant federal data started coming through this morning that could provide a stronger direction.

The average interest rate on a 30-year, fixed-rate mortgage ticked down to 6.17% APR, according to rates provided to SS by Zillow. This is two basis points lower than yesterday but six 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.

You may have been expecting rates to drop more, since last week the Federal Reserve cut short-term borrowing rates 25 basis points. But the Fed doesn’t set mortgage rates. Mortgage rates fell significantly in the run-up to the Fed’s September meeting, when the central bankers started cutting the federal funds rate (that’s the rate the Fed actually sets). Since then, mortgage rates have had their ups and downs, but within a pretty limited range.

This week’s data could potentially push mortgage rates one way or the other — more on that below the graph.

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 are focused on Bureau of Labor Statistics data that should provide a pulse check on the U.S. economy. These are big reports in any month, but the latest crop might get more attention than usual. Economic forecasters are hungry for economic data since the BLS and other agencies delayed or canceled various reports during the government shutdown.

Today’s Employment Situation Summary — better known as the jobs report — kicked things off. The November numbers came in a little high, with the 64,000 jobs created just above economists’ predictions. That’s good news, but the bad news is that the unemployment rate came in above expectations, too.

Even though job growth is slightly better than expected, the unemployment rate is likely to get more attention. At 4.6%, it’s the highest unemployment has been since September 2021. Rising unemployment implies that the Fed’s December rate cut was a good call. When the labor market’s weakening, the central bankers make borrowing cheaper to encourage employers to spend and hire. We may see mortgage rates respond by going down, anticipating a possible January Fed cut.

But we’re about to get even more fresh data: On Thursday, the BLS releases November’s Consumer Price Index. The rate of inflation has remained above the Fed’s target of 2% since March 2021. Though CPI isn’t the central bankers’ inflation measure of choice, this report will provide a recent snapshot of household spending and the effect of inflation on day-to-day expenses. If inflation’s running extra hot, that could push mortgage rates up. Restricting borrowing through higher rates is the Fed’s key tool for reining in inflation.

The Fed makes decisions based on numbers, not vibes, so this data could potentially point the committee in a clear direction. Right now, the outlook is murky for the Federal Reserve’s next meeting, which will be Jan. 27-28, 2026. Markets are split on whether the central bankers will cut again or maintain the current rate.

Another rate cut will only happen if inflation and unemployment are kept in check, and by the time the Fed meets again, December’s data will have been released, too. If it looks like the Federal Reserve’s going for another rate cut, mortgage rates are likely to go down. But if it looks like the Fed will maintain current levels — or even raise rates — mortgage rates will head upward in anticipation.

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 could start considering a refi if your current rate is around 6.69% 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.