Mortgage Rates Today, Thursday, August 20: Down Again

Mortgage interest rates remained on the downturn Thursday, dropping again following the Treasury Department’s signal to expand purchases of long‑term bonds. Because mortgage rates are pegged to the 10‑year Treasury note, positive movements in the bond market translate directly to lower mortgage costs.

Average 30‑year fixed‑rate mortgages fell to 6.51% APR, three basis points less than yesterday and five basis points below last week. The figure comes from Zillow data provided to NerdWallet.

Rising inflation had driven recent volatility in the bond market, prompting investors to scrutinize the Federal Reserve’s stance on price pressures. Readers can find additional insights after the infographic showing mortgage rate trends over the past month.

Average mortgage rates, last 30 days

What Influences Mortgage Rates?

Mortgage rates are constantly shifting, as a key determinant depends on reactions to inflation reports, employment data, Federal Reserve meetings, and global events. Even minor bond‑market moves can ripple through consumer financing.

It is important to note that the Federal Reserve does not directly set mortgage rates. While headlines often mention the Fed adjusting its policy, there is actually only one benchmark—the federal funds rate, which reflects overnight interbank borrowing between banks. However, that short‑term benchmark quickly permeates the broader economy. Anticipating a potential Fed action, lenders begin incorporating expected rate changes into their offerings before any official announcement.

Yesterday afternoon, the Federal Reserve released its July meeting minutes. The council held rates steady, though three members dissented and called for a 25‑basis‑point increase. Individual opinions differ on how aggressively the central bank should respond to inflation.

Personal comments suggest that policymakers indicated a cautious approach: several participants believed further tightening would be warranted if inflation persisted, implying higher interest rates eventually. Nevertheless, the wording was deliberately tentative, leaving room for interpretation even amid elevated price pressures.

Given the July decision, subsequent data shows inflation softening—CPI decreased from 3.5% in June to 3.4% in July, still well above the Fed’s 2% target. Markets interpreted this modest slowdown as evidence that a September rate hike becomes less probable. Next coming data includes July’s Personal Consumption Expenditures Price Index, which closely tracks inflation expectations.

Should a September rate increase materialize—or occur at one of the remaining Fed meetings late in the year—it would likely push mortgage rates upward. Since cuts appear improbable, stable rates represent the most favorable outlook at this time.

However, U.S. dynamics alone cannot capture the entire picture. Regional conflicts, such as those involving Iran, can significantly impact mortgage pricing, often driving rates up when tensions rise and pulling them lower when uncertainty eases.

Refinancing may be worthwhile if today’s rates sit at least half a percentage point below your current balance—and you are confident you will remain housed for the life of the loan. With rates hovering near 6.51%, homeowners approaching a 7.00% rate point could consider a refi as a practical step toward reducing monthly obligations.

Your goals matter: are you prioritizing lower payments, a shorter term, or access to home‑equity liquidity? For instance, a cash‑out refinance might justify a higher rate if doing so unlocks meaningful cash while keeping total costs advantageous.

For specific calculations, NerdWallet’s refinance estimator can project potential savings and outline the breaking‑even horizon for different scenarios.

Should I Start Shopping for a Home?

Timing is rarely a universal “right moment”—the critical factor is whether you can comfortably accommodate a mortgage at current rates. If the answer is affirmative, focus on pre‑approval, compare lender offers, and determine which monthly payment fits your budget rather than obsessing over hypothetical lower rates elsewhere.

NerdWallet’s affordability tool can help project your prospective monthly outlay. Should a newer property not yet meet your plans, proactive steps can strengthen your buying profile. Pay down debt, increase your down‑payment savings, and you will both free up cash flow for future payments and position yourself for potentially better rates when the time comes.

Should I Lock My Rate?

If you hold a competitive quote and your lender provides a float‑down feature, locking improves confidence. A float‑down mechanism allows you to benefit from temporarily decreased rates within the designated holding window.

Rate locks shield you from price spikes while the loan documents are processed, eliminating anxiety amid a volatile market. The peace of mind that comes with a secured rate can outweigh the pursuit of theoretically lower figures.

Nerdy Reminder: Interest rates can adjust daily and sometimes even hourly. If you are satisfied with your current proposal, committing to it is perfectly reasonable.

Why Did the Online Rate Differ From My Quote?

The displayed price represents a sample rate typically offered to borrowers with pristine credit, generous down payments, and coverage for mortgage points. That estimate may not reflect the conditions of individual qualification.

Beyond macro‑economic variables beyond the lender’s control, a customized quote hinges on personal facts. For example, two applicants with identical credit scores could receive different rates based on their full financial profiles.

If I Apply Now, Can I Secure That Same Rate?

Possibly—but dynamic pricing means the quoted number may evolve even before you lock in an offer. Lenders recalc rates multiple times daily in response to shifting market conditions, influencing what each applicant can realistically obtain.

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About the author

Kate Wood is a lending expert and certified financial health counselor (CHFC) who has joined NerdWallet since 2019. Her academic training in sociology fuels her advocacy for housing equity and greater accessibility to higher education, and she frequently breaks down complex public policies to empower readers.

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