Mortgage Rates Today, Thursday, December 18: A Little Lower

Rates moved a little lower today, but we could see more of a drop soon.

The average interest rate on a 30-year, fixed-rate mortgage ticked down to 6.08% APR, according to rates provided to NerdWallet by Zillow. This is five basis points lower than yesterday and two basis points higher than a week ago. (See our chart below for more specifics.) A basis point is one one-hundredth of a percentage point.

Why the potential for downward momentum? This morning the Bureau of Labor Statistics released November’s Consumer Price Index. Markets anticipated that this could be an especially bad report, with a 3.1% rate of inflation. That would have been a slight increase from the 3% we saw in September, which because of the government shutdown was the most recent data. (For additional context, the Federal Reserve’s target rate of inflation is 2%.)

This morning’s numbers came as a pleasant surprise, with inflation apparently slowing to an overall rate of 2.7% year over year. Though CPI isn’t the central bankers’ inflation measure of choice, these are still important numbers. Coupled with this week’s November jobs report, this makes a case that the Fed’s December rate cut was the right move — and if these trends continue, we could see the central bankers continuing to lower rates in 2026.

Mortgage rates are constantly changing, since a major part of how rates are set depends on reactions to new inflation reports, job numbers, Fed meetings, global news … you name it. For example, even tiny changes in the bond market can shift mortgage pricing.

Thanks to this week’s major data drops, the case for additional rate cuts from the Federal Reserve looks good. Inflation appears to be in check, which would allow the central bankers to be a little less cautious about cutting. Making borrowing more expensive by raising the federal funds rate is the Fed’s key tool for taming inflation.

Employment is the other piece of the puzzle, and the November Employment Situation Summary (better known as the jobs report) released Dec. 16 bolstered the case for lower interest rates. Though the numbers were better-than-expected on job creation, the unemployment rate came in above expectations, too. When the labor market’s weakening, the Federal Reserve makes borrowing cheaper to encourage employers to spend and hire.

Since mortgage rates react quickly to any change, we could see mortgage rates trending lower in the short term. But the outlook’s still murky for the Federal Reserve’s next meeting, which will be Jan. 27-28, 2026. The central bankers meet every six weeks, so their reaction time is a lot slower. By then, we’ll have a better picture of the economy’s health, since December’s data will have been released, too.

Markets are split on whether the central bankers will cut again or maintain the current rate. If it looks like the Federal Reserve’s going for another rate cut, mortgage rates could gain even more downward momentum. But if things shift and it looks like the Fed will maintain current levels — or even raise rates — mortgage rates could abruptly change course.

Refinancing might make sense if today’s rates are at least 0.5 to 0.75 of a percentage point 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 right now, you could start considering a refi if your current rate is around 6.58% or higher.

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 might be more comfortable with paying a higher rate for a cash-out refinance than you would for a rate-and-term refinance, so long as the overall costs are 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’s refinance calculator to estimate savings and understand how long it would take to break even on the costs of refinancing.

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

If the answer is yes, don’t get too hung up on whether you could be missing out on lower rates later; you can refinance down the road. Focus on getting preapproved, comparing lender offers, and understanding what monthly payment works for your budget.

NerdWallet’s affordability calculator can help you estimate your potential monthly payment. If a new home isn’t in the cards right now, there are still things you can do to strengthen your buyer profile. Take this time to pay down existing debts and build your down payment savings. Not only will this free up more cash flow for a future mortgage payment, 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 locking your mortgage rate, especially if your lender offers a float-down option. A float-down lets you take advantage of a better rate if the market drops during your lock period.

Rate locks protect you from increases while your loan is processed, and with the market forever bouncing around, that peace of mind can be worth it.

The rate you see advertised is a sample rate — usually for a borrower with perfect credit, making a big down payment, and paying for mortgage points. That won’t match every buyer’s circumstances.

In addition to market factors outside of your control, your customized quote depends on your:

• Location and property type

Even two people with similar credit scores might get different rates, depending on their overall financial profiles.

Maybe — but even personalized rate quotes can change until you lock. That’s because lenders adjust pricing multiple times a day in response to market changes.