Today's Mortgage Rates & Trends – April 21, 2022: Rates pull back

Rates on 30-year mortgages backed down Wednesday, while the 15-year average climbed to a new long-term high Wednesday. Both averages sit in their highest range in over 13 years.

Today’s National Mortgage Rate Averages

After notching a new long-term peak Tuesday, the 30-year average moved lower Wednesday, shedding nine basis points to 5.57%. Still, the flagship average is in its most expensive range since spring 2009.

Wednesday’s 15-year rates moved the other way, adding to a three-day surge that has taken them 18 points up this week. Now at 5.16%, the 15-year average is similarly at its highest level in 13 years.

Meanwhile, Jumbo 30-year rates marked time for a third day Wednesday, remaining flat at 4.69%. The Jumbo 30-year average is still below the peak experienced at the outset of the pandemic, but is in territory not seen since April 2020.

All three averages have surged over the last eight months, taking them far above the lows enjoyed last summer when a major dip dramatically sank rates. The 30-year average is currently an eye-popping 2.68 percentage points more expensive than the August low point, while the 15-year and Jumbo 30-year averages are up 2.95 and 1.63, respectively.

Refinance rates moved similarly Tuesday. The 30-year refi average dropped seven points while the 15-year average added 13 points. Jumbo 30-year refi rates held steady. The cost to refinance with a fixed-rate loan is currently up to 17 points more expensive than new purchase loans.

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Lowest Mortgage Rates by State

The lowest mortgage rates available vary depending on the state where originations occur. Mortgage rates can be influenced by state-level variations in credit score, average mortgage loan term, and size, as well as individual lenders’ varying risk management strategies.

These rates are surveyed directly from over 200 top lenders.

What Causes Mortgage Rates to Rise or Fall?

Mortgage rates are determined by a complex interaction of macroeconomic and industry factors, such as the level and direction of the bond market, including 10-year Treasury yields; the Federal Reserve’s current monetary policy, especially as it relates to funding government-backed mortgages; and competition between lenders and across loan types. Because fluctuations can be caused by any number of these at once, it’s generally difficult to attribute the change to any one factor.

Macroeconomic factors have kept the mortgage market relatively low for much of this year. In particular, the Federal Reserve has been buying billions of dollars of bonds in response to the pandemic’s economic pressures, and continues to do so. This bond-buying policy (and not the more publicized federal funds rate) is a major influencer on mortgage rates.

On March 16, the Fed announced that it expects to begin reducing its balance sheet in May, meaning it will start reducing the overall amount of bonds it owns. This will be on top of its existing move to reduce new bond purchases by an increment every month, the so-called taper, which began in November.

The Fed’s rate and policy committee, called the Federal Open Market Committee (FOMC), meets every 6-8 weeks. Their next scheduled meeting will be held May 3-4.

Methodology

The national averages cited above were calculated based on the lowest rate offered by more than 200 of the country’s top lenders, assuming a loan-to-value ratio (LTV) of 80% and an applicant with a FICO credit score in the 700-760 range. The resulting rates are representative of what customers should expect to see when receiving actual quotes from lenders based on their qualifications, which may vary from advertised teaser rates.

For our map of the best state rates, the lowest rate currently offered by a surveyed lender in that state is listed, assuming the same parameters of an 80% LTV and a credit score between 700-760.