Mortgage rates are down across the board today. The average 30-year fixed rate dropped 18 basis points — from 6.74% to 6.56% — and the 15-year fixed rate fell back below 6%.

As expected, the Federal Reserve announced in yesterday's Fed meeting that it will not lower rates this month. So, why are rates decreasing after this news?

Well, the Consumer Price Index (CPI) report also came out yesterday, and it revealed that inflation is slowing down. May inflation increased 3.3% year over year (down from April's 3.4% annual increase) and remained unchanged from last month (an improvement from April's 0.3% month-over-month increase). This strong CPI report is a sign that inflation is slowly but surely getting to the Fed's target rate of 2% — which is what the central bank wants before it slashes the federal funds rate.

Still, we're a long way from drastic mortgage rate decreases. Yesterday's Fed meeting indicated that the central banks will probably only cut its rate once in 2024, but there could be several decreases next year. Rates probably won't make significant drops until well into 2025.

Today's mortgage rates

Here are the current mortgage rates, according to the latest Zillow data:

• 30-year fixed: 6.56%

• 20-year fixed: 6.27%

• 15-year fixed: 5.86%

• 5/1 ARM: 6.65%

• 7/1 ARM: 6.88%

• 30-year FHA: 5.93%

• 15-year FHA: 6.13%

• 30-year VA: 5.89%

• 15-year VA: 5.65%

• 5/1 VA: 6.13%

Remember, these are the national averages and rounded to the nearest hundredth.

All mortgage rates are down today with the exception of the 15-year VA loan rate, which remained stagnant.

Learn more: 5 strategies to get the lowest mortgage rates

How do mortgage rates work?

A mortgage interest rate is a fee for borrowing money from your lender, expressed as a percentage. There are two basic types of mortgage rates: fixed and adjustable rates.

A fixed-rate mortgage locks in your rate for the entire life of your loan. For example, if you get a 30-year mortgage with a 6.75% interest rate, your rate will stay at 6.75% for the entire 30 years. (Unless you refinance or sell the home.)

An adjustable-rate mortgage keeps your rate the same for the first few years, then changes it periodically. Let’s say you get a 5/1 ARM with an introductory rate of 6%. Your rate would be 6% for the first five years and then the rate would increase or decrease once per year for the last 25 years of your term. Whether your rate goes up or down depends on several factors, such as the economy and U.S. housing market.

At the beginning of your mortgage term, most of your monthly payment goes toward interest. As time passes, less of your payment goes toward interest, and more goes toward the mortgage principal or the amount you originally borrowed.

What factors impact your mortgage rate?

Two categories of factors affect your mortgage rate: ones you can control and ones you cannot control.

What factors can you control? First, you can compare the best mortgage lenders to find the one that gives you the lowest rate and fees.

Second, lenders typically extend lower rates to people with higher credit scores, lower debt-to-income (DTI) ratios, and considerable down payments. If you can save more or pay down debt before securing a mortgage, a lender will probably give you a better interest rate.

Read more: The best mortgage lenders for first-time home buyers

What factors can you not control? In short, the economy.

The list of ways the economy impacts mortgage rates is long, but here are the basic details. If the economy — think employment rates, for example — is struggling, mortgage rates go down to encourage borrowing, which helps boost the economy. If the economy is strong, mortgage rates go up to temper spending.

Dig deeper: What the Fed rate decision means for bank accounts, CDs, loans, and credit cards

30-year vs. 15-year fixed mortgage rates

Two of the most common mortgage terms are 30-year and 15-year fixed-rate mortgages. Both lock in your rate for the entire loan term.

A 30-year mortgage is popular because it has relatively low monthly payments. But it comes with a higher interest rate than shorter terms, and because you’re accumulating interest for three decades, you’ll pay a lot of interest in the long run.

A 15-year mortgage can be great because it has a lower rate than you’ll get with longer terms, so you’ll pay less in interest over the years. You’ll also pay off your mortgage much faster. But your monthly payments will be higher because you’re paying off the same loan amount in half the time.

Basically, 30-year mortgages are more affordable from month to month, while 15-year mortgages are cheaper in the long run.