Mortgage rates remain elevated, with the average 30-year fixed rate at 6.75% as of August 12 — which is significantly higher than the sub-3% mortgage rates that were available at the start of the decade. Is the inflation drop good news for mortgage rates? Falling inflation is generally an encouraging sign for mortgage rates, but that doesn't mean home loan rates will immediately drop every time inflation does. That's because mortgage rates are influenced by several parts of the economy, and inflation is only one of those driving factors. If inflation continues falling and the labor market continues to soften, the conditions for lower mortgage rates could improve.