After climbing throughout the week, mortgage rates pulled back slightly on Friday, though the decline does little to offset the sharp gains seen over recent sessions.
The average rate on a 30-year fixed mortgage dipped to 7.41% APR, according to Zillow data provided to NerdWallet. That represents a three-basis-point decrease from Thursday but remains 27 basis points higher than a week ago. A basis point equals one-hundredth of a percentage point.
The modest retreat coincided with the release of September employment data from the Bureau of Labor Statistics. Employers added fewer jobs than forecast, and the unemployment rate rose to 4.2%, pointing to a softening labor market. Combined with cooler-than-expected inflation readings from August’s Personal Consumption Expenditures index, the reports reduce the likelihood of a Federal Reserve rate hike at its next meeting.
“The data was also enough to slow the bond market’s roll, at least for a moment, so we’ll likely see slightly softer mortgage rates,” says Kate Wood, lending expert at NerdWallet. “But think dip, not dive — and mortgage rates have already risen so much this week that honestly it’s unlikely to even be that much of a dip.”
With financial markets closed for the weekend, rates are expected to hold largely steady until Monday’s reopen.
Average mortgage rates, last 30 days
Kate on Rates: October 1, 2026
What influences mortgage rates?
Mortgage rates are constantly changing, driven largely by market reactions to inflation reports, employment figures, Federal Reserve policy decisions, and geopolitical developments. Even minor shifts in the bond market can move mortgage pricing.
Rates have held above 7% for an extended period as persistent inflation exerts upward pressure on financial markets. Mortgage rates typically track the yield on the 10-year Treasury note — the return investors require to lend to the U.S. government. This week, that yield reached its highest level since 2002.
Structural forces pressuring the bond market, including elevated government borrowing and massive technology-sector spending on artificial intelligence and data centers, show no signs of abating. Meanwhile, ongoing conflict in the Middle East continues to strain global oil supplies, sustaining inflationary pressure and keeping mortgage rates elevated.
In its September meeting, the Federal Reserve raised its benchmark rate by 25 basis points to combat inflation. While the Fed does not set mortgage rates directly, markets scrutinize its signals for clues on future policy. The central bank must balance inflation control with maintaining a healthy labor market — objectives that are currently in tension. With inflation still above target and September’s jobs data coming in weak, the Fed is widely expected to hold rates steady at its October 27–28 meeting. Public commentary from Fed officials in the coming weeks may offer further insight.
For borrowers, the expectation of a policy pause could provide modest near-term relief. However, a dramatic decline is unlikely; the fundamental drivers pushing up long-term borrowing costs are not expected to ease soon. Buyers should budget around current rates and treat any dip as a bonus rather than a baseline.
For those hoping to refinance, patience remains essential.
Should I start shopping for a home?
There is no universal “right” time to enter the market — the deciding factor is whether you can comfortably afford a mortgage at today’s rates.
If the answer is yes, don’t fixate on the possibility of lower rates later; refinancing is always an option down the road. Focus instead on securing preapproval, comparing lender offers, and determining a monthly payment that fits your budget.
Affordability calculators can help estimate potential payments. If buying isn’t feasible right now, use the time to reduce existing debt and build savings for a down payment. Both steps improve cash flow and can qualify you for a better rate when you’re ready to purchase.
Should I lock my rate?
If you have a quote you’re satisfied with, locking the rate is worth considering — especially if your lender offers a float-down provision, which allows you to capture a lower rate if the market improves during the lock period.
Rate locks shield you from increases while your loan is processed, and in a volatile market, that certainty can be valuable.
Nerdy Reminder: Rates can change daily, even hourly. If you’re happy with the deal in hand, committing is a reasonable choice.
Why is the rate I saw online different from the quote I got?
Advertised rates are sample rates — typically reserved for borrowers with excellent credit, large down payments, and a willingness to pay discount points. Most buyers won’t match that profile.
Beyond market forces, your personalized quote depends on your:
Even two people with similar credit scores may receive different rates based on their overall financial picture.
If I apply now, can I get the rate I saw today?
Possibly — but even personalized quotes can change until you lock. Lenders adjust pricing multiple times a day in response to market movements.
