Mortgage rates declined today as Treasury yields eased ahead of Friday’s inflation report, though analysts caution against interpreting the drop as the start of a sustained downward trend.
The average rate on a 30-year fixed-rate mortgage fell to 6.65% APR this morning, according to data provided to NerdWallet by Zillow. That represents a 17-basis-point decrease from yesterday and 13 basis points lower than a week ago. (See the chart below for additional details.) A basis point equals one one-hundredth of a percentage point.
The decline may look significant, but lenders have been inconsistent lately. With a jumble of conflicting economic signals in play, that unpredictability is understandable. Each lender sets prices independently given the current uncertainties:
- Average mortgage rates, last 30 days
Kate on Rates: September 3, 2026
What influences mortgage rates?
Mortgage rates are constantly changing, largely because they respond to new inflation reports, employment data, Federal Reserve decisions, and global developments. Even minor shifts in the bond market can influence mortgage pricing.
Several forces have pushed rates higher recently, and they largely converge on a single theme: inflation.
First, geopolitical tension in Iran. After weeks of relative calm, hostilities have escalated, and mortgage rates have historically risen during such periods. Rates are tied to the yield on the 10-Year Treasury note. Concerns that the conflict could disrupt trade, drive up oil prices, and fuel inflation continue to push bond yields higher — and rates along with them.
Second, Federal Reserve communication. Chair Kevin Warsh has signaled that he wants officials to speak less and has already altered post-meeting statements. Nonetheless, markets still parse every remark. On Aug. 28, Warsh delivered his first formal speech as chair. While cautious in tone, his comments on inflation were firm enough that Fed watchers now anticipate a quarter-point rate hike at the Sept. 15-16 meeting. The Federal Reserve does not set mortgage rates directly, but its actions are highly influential — and rates rose following Warsh’s remarks.
However, markets are volatile. Last week, several Fed officials suggested a hike might not be necessary, which reduced the odds and trimmed a few basis points from Friday’s average rates.
Speaking of Friday: The case for holding the federal funds rate weakened last week when August’s Employment Situation Summary revealed a surprisingly robust labor market. The U.S. economy added 162,000 jobs, more than triple economists’ forecasts, while the unemployment rate held steady.
This was especially striking after July’s initial report showed a loss of 23,000 jobs. That figure has been revised upward to 21,000 jobs gained — still well below August, but at least now positive.
If the labor market were weakening, the Fed would be less inclined to raise rates. Higher rates discourage business expansion and hiring, so a fragile job market makes rate increases risky even when inflation is elevated. A strong labor market, by contrast, gives the Fed more confidence to address inflation.
Finally, inflation itself. If you have bought gas, groceries, or anything recently, you have felt the impact of rising prices. The Fed targets 2% inflation as healthy, but readings have exceeded that since March 2021.
New inflation data arrives this week: August’s Consumer Price Index is scheduled for release on Friday, Sept. 11. If CPI meets or exceeds expectations, the odds of a rate hike at next week’s Fed meeting could increase.
Refinancing might make sense if today’s rates are at least 0.5 to 0.75 percentage points lower than your current rate — and if you plan to stay in your home long enough to recoup closing costs.
With rates at current levels, you could consider refinancing if your existing rate is around 7.15% or higher.
Also evaluate your goals: Are you aiming to lower your monthly payment, shorten your loan term, or access home equity? For example, you might accept a higher rate for a cash-out refinance if the overall costs are lower than keeping your original mortgage and adding a HELOC or home equity loan.
If you are seeking a lower rate, use NerdWallet’s refinance calculator to estimate potential savings and determine how long it would take to break even on refinancing costs.
Should I start shopping for a home?
There is no universal “right” time to begin shopping — what matters is whether you can comfortably afford a mortgage at today’s rates.
If the answer is yes, do not fixate on the possibility of lower rates later; you can always refinance down the road. Focus on obtaining preapproval, comparing lender offers, and understanding what monthly payment fits your budget.
NerdWallet’s affordability calculator can help you estimate your potential monthly payment. If purchasing a home is not feasible right now, you can still strengthen your buyer profile. Use this time to pay down existing debt and grow your down payment savings. This not only frees up cash flow for a future mortgage payment but can also help you secure a better rate when you are ready to buy.
Should I lock my rate?
If you already have a quote you are satisfied with, consider locking your mortgage rate, particularly if your lender offers a float-down option. A float-down allows you to benefit from a better rate if the market declines during your lock period.
Rate locks protect you from increases while your loan is processed, and given the market’s volatility, that peace of mind can be worthwhile.
Nerdy Reminder: Rates can change daily, and even hourly. If you are happy with your deal, it is acceptable to commit.
Why is the rate I saw online different from the quote I received?
The advertised rate is a sample rate — typically for a borrower with excellent credit, a substantial down payment, and mortgage points. It will not match every buyer’s situation.
In addition to market factors beyond your control, your personalized quote depends on your:
Even two borrowers with similar credit scores may receive different rates based on their overall financial profiles.
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 daily in response to market movements.
About the author
Abby Badach Doyle has been writing about homeownership and mortgages for NerdWallet since 2022. Her work has appeared in The Associated Press, The Washington Post, and The Seattle Times. From interactive tools to practical advice, Abby is dedicated to making the homebuying journey less stressful — especially for first-time buyers.
As a reporter, she is interested in innovative housing solutions, such as co-living, and personal stories about how homeownership builds community and belonging.
Abby is also a musician, songwriter, and producer who understands the challenge of balancing creative fulfillment with financial stability. In 2024, she produced a special episode of NerdWallet’s “Smart Money” podcast on navigating income swings in a creative career.
Abby is based in Pittsburgh, a city defined by working-class grit and neighborly spirit. Outside of writing about personal finance, she maintains an urban homestead: playing fiddle, raising chickens, and preserving the bounty from her garden.