Mortgage Rates Today, Wednesday, February 18: Rates Remain Low

Mortgage rates are higher today, but let’s be real: we’re still seeing unusually low rates. If we look at Freddie Mac’s weekly mortgage rate survey, the last time we saw APRs this low was in September 2022.

The average interest rate on a 30-year, fixed-rate mortgage rose to 5.89% APR, according to rates provided to NerdWallet by Zillow. That’s up 16 basis points from yesterday but down five basis points from a week ago. (See our chart below for more details.) A basis point is one-hundredth of a percentage point.

Keep in mind, this is a national average — the rate you’ll be quoted by the lender will vary, and it can vary significantly, even if you’re providing everyone with the exact same financing. I took a quick look around the web this morning and checked out sample offers from five different mortgage lenders. The range between the lowest and highest offers I saw was 73 basis points.

If that doesn’t convince you to shop around, maybe this will: According to Freddie Mac research, borrowers who get quotes from four or more mortgage lenders can save more than $1,200 a year. That’s a nice chunk of change to avoid spending on mortgage interest.

There are mortgage rates. constantly changing, Since a large part of How are rates determined? Depending on the reaction to new inflation reports, job numbers, Fed meetings, global news… you name it. For example, even small changes in the bond market can change mortgage rates.

Right now, the answer to “when will mortgage rates fall” is “they just did”. Last week’s consumer price index was overall better than expected. Inflation Markets immediately interpreted the news as the prospect of a spring rate cut from the Federal Reserve, and mortgage rates quickly fell on the same idea.

Here’s the thing, though: markets react like my dog. A feed reacts like a person. When my dog ​​sees a truck pull up on our street, he barks like crazy before the ignition is off. To him, a truck means someone is coming to our door, and he feels really strongly about stranger danger. For me, a person, my reaction is more of, “Oh. A truck. Please stop barking.”

The latter is pretty much how the Fed reacts – to really paraphrase my example, they’ll wait for more evidence that someone is actually coming in the door. “From a macroeconomic perspective, these inflation numbers look promising,” says Elizabeth Renter, senior economist at NerdVault. But, she cautions, “These numbers don’t necessarily indicate that all is well, at least not yet. If you wear your Fed hat, you know we need more data to know if inflation will continue in the right direction, without hurting the labor market.”

We’re going to get additional information very soon, as a new personal consumption expenditure report comes out on Friday. PCE is the Fed’s priority. Inflation rate. If the PCE also shows easing inflation, the chances of a March rate cut will increase. Inflation has been above the central bankers’ 2% target for nearly five years, but if it appears to be easing, there is less need to keep rates high.

For now, most forecasters still expect the Fed to keep the federal funds rate steady at its March 17-18 meeting. But we’ll be watching closely, even if we’re not barking about everything.

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 break even on closing costs).

With rates where they are now, if your current rate is 6.39% or higher you may want to start considering a refinance.

Also consider your goals: Are you trying to lower your monthly payment, shorten your loan term or turn home equity into cash? For example, you may be more comfortable paying a higher rate for a Cash Out Refinance More than you would for a rate and term refinance, as long as the total cost is lower than if you kept your original mortgage and added a HELOC or home equity loan.

If you’re looking for a lower rate, use NerdWallet. Refinance Calculator To estimate the savings and understand how long it will take to break even the refinancing costs.

There is no universal “right” time to start buying – what matters is whether you can comfortably afford a mortgage at today’s rates.

If the answer is yes, don’t wait too long to see if you can miss out on lower rates later. You can refinance down the road. Focus on getting. Pre-approvedComparing lender offers, and figuring out what monthly payment works for your budget.

of NerdWallet Affordability Calculator Can help estimate your potential monthly payment. If a new home isn’t in the cards just yet, there are still things you can do to strengthen your buyer profile. Take this time to pay off existing debts and increase your down payment savings. Not only will this free up more cash flow for future mortgage payments, but it can also get you a better interest rate when you’re ready to buy.

If you already have a quote you’re happy with, you should consider it. Locking in your mortgage rateEspecially if your lender offers a float-down option. A floatdown allows you to take advantage of a better rate if the market falls during your lock-in period.

Rate locks protect you from hikes during your loan process, and with the market forever bouncing around, the peace of mind can be worth it.

The rate you see advertised is a Sample rate – Usually for a borrower with perfect credit, make a large down payment, and pay off Mortgage points. It won’t match every buyer’s situation.

In addition to market factors beyond your control, the quote you want depends on you:

• Location and type of property

Even Two people with the same credit score Depending on their overall financial profiles, different rates may be available.

Maybe – but even personalized rates Can be changed until you lock. This is because lenders adjust prices several times a day in response to market changes.