Mortgage rates slipped modestly this week as conflicting economic signals complicated the Federal Reserve’s policy outlook. The average 30-year fixed rate declined five basis points to 6.28% APR, based on daily Zillow data aggregated over the past five business days.
Last week’s Personal Consumption Expenditures index — the Fed’s preferred inflation gauge — showed price pressures reaching a three-year high, prompting speculation that policymakers might raise borrowing costs at their upcoming meeting. However, Friday’s employment report shifted the narrative. The U.S. economy added only 57,000 jobs in June, roughly half the 115,000 forecast, suggesting the labor market may be cooling faster than anticipated.
Traders have since recalibrated expectations, with most now projecting the Fed will hold rates steady until at least September. Mortgage rates typically move in anticipation of Fed actions, so a prolonged pause could offer relief to prospective buyers wary of further increases. Nevertheless, borrowing remains expensive by historical standards, and many households continue to feel priced out of homeownership.
What it’s like to buy a home right now
Current market conditions present the following snapshot for buyers:
- How mortgage borrowers can secure the lowest rates
Strengthening one’s financial profile before applying remains the most effective lever for reducing borrowing costs. Borrowers with higher credit scores and substantial down payments typically qualify for the best offers. Repeat buyers often have an advantage here, leveraging equity from a prior sale to make larger down payments.
Lenders also reserve their most competitive rates for applicants with low debt-to-income ratios, generally below 36%. Additionally, comparing offers from multiple lenders can yield meaningful savings, though the process is time-consuming. Working with a mortgage broker can streamline this step, allowing borrowers to submit information once and receive quotes from a range of institutions.
Taylor Getler is a home and mortgages writer for NerdWallet. Her work has been featured in outlets such as MarketWatch, Yahoo Finance, MSN and Nasdaq. Taylor is enthusiastic about financial literacy and helping consumers make smart, informed choices with their money.