Mortgage Rate Update: Thursday, August 27, Sees Slight Decline

According to data from Zillow provided to NerdWallet, the average interest rate for a 30-year fixed-rate mortgage has fallen to 6.51% APR. This represents a decrease of 13 basis points from yesterday, remaining consistent with rates observed a week ago. (Please refer to the chart below for detailed specifics.) For context, one basis point is equivalent to one one-hundredth of a percentage point.

While today’s rates show a downward trend, they follow a recent spike. Despite the apparent drop, current mortgage rates are largely in line with the levels seen over the past week.

Average mortgage rates, last 30 days

Kate on Rates: August 20, 2026

What influences mortgage rates?

Mortgage rates are subject to constant fluctuation, as they are heavily influenced by inflation reports, employment data, Federal Reserve meetings, and global economic shifts. Even minor movements within the bond market can cause shifts in mortgage pricing.

On Wednesday morning, the Bureau of Economic Analysis released the Personal Consumption Expenditures (PCE) Price Index, which serves as the Federal Reserve’s preferred inflation metric. The report indicated that inflation rose by 0.2% in July, slightly exceeding Wall Street’s 0.1% forecast. This brings the year-over-year inflation rate to 3.7%—matching the previous month and remaining significantly above the Federal Reserve’s 2% target.

“The [Federal Open Market Committee] appears to have more confidence in inflation subsiding naturally than the markets do,” notes Kate Wood, a lending expert at NerdWallet. “Concerns that inflation may persist have been driving up both bond yields and mortgage rates.”

The tension between market sentiment and Federal Reserve expectations is particularly evident in the forecasts for the next central bank meeting. Generally, inflation that exceeds predictions leads to speculation that the Fed may increase the overnight borrowing rate.

However, CME FedWatch futures traders currently estimate a more than 66% probability that the Fed will maintain steady rates in September, a figure that has risen despite the latest inflation data.

Refinancing may be a viable option if today’s rates are at least 0.5 to 0.75 percentage points lower than your current rate, provided you plan to remain in your home long enough to recoup the closing costs.

Given current market conditions, you might consider refinancing if your existing rate is approximately 7.01% or higher.

When evaluating your options, consider your primary objective: are you looking to reduce monthly payments, shorten your loan term, or access home equity? For instance, you may find a cash-out refinance more acceptable even at a slightly higher rate, provided the total cost is lower than maintaining your current mortgage and adding a HELOC or home equity loan.

Should I start shopping for a home?

There is no definitive “right” time to enter the market; the decision should depend on whether you can comfortably afford a mortgage at current rates.

If you can afford it, avoid being paralyzed by the possibility of lower rates in the future, as refinancing remains an option later. Instead, focus on obtaining preapproval, comparing lender quotes, and determining a monthly payment that fits your budget.

If purchasing a home isn’t feasible right now, use this time to strengthen your financial profile by paying down existing debt and increasing your down payment savings. This approach can improve your cash flow and potentially secure a better interest rate when you are ready to buy.

Should I lock my rate?

If you have received a quote that meets your needs, consider locking your rate—especially if your lender offers a “float-down” option. A float-down allows you to secure a lower rate if market conditions improve during your lock period.

Rate locks offer protection against rising costs while your loan is being processed, providing stability in a volatile market.

Nerdy Reminder: Rates can fluctuate daily and even hourly. If you are satisfied with your current offer, it may be wise to commit.

Why is the rate I saw online different from my quote?

Online advertised rates are typically sample rates based on ideal scenarios, such as borrowers with perfect credit, large down payments, and the purchase of mortgage points. These may not reflect your specific situation.

Beyond market volatility, your personalized rate is determined by your unique financial profile, including your credit score, debt-to-income ratio, and loan details.

Even two borrowers with similar credit scores may receive different rates based on their overall financial health.

If I apply now, can I get the rate I saw today?

It is possible, but keep in mind that even personalized quotes can change until you officially lock your rate. Lenders frequently adjust pricing throughout the day to stay aligned with market movements.

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