Today’s Mortgage Rates & Trends – December 7, 2022: Rates yo-yo

Rates on 30-year mortgages moved higher Tuesday, building an up-and-down pattern over the last few days. After again breaking through the 7% threshold last week, the flagship average is currently reading in the mid-6% range.

Today’s National Mortgage Rate Averages

The 30-year average climbed Tuesday, tacking on 14 basis points to rise to 6.64%. Still, rates are sitting in a range not seen since mid-September, and are also close to a full percentage point below the 20-year high of 7.58% they averaged on October 21.

Tuesday’s 15-year rates also gained, but by a more modest seven basis points. Now averaging 5.92%, rates on 15-year loans are still 1.11% cheaper than October’s peak of 7.03%, which was its highest mark since 2007.

Jumbo 30-year rates meanwhile moved the other way, declining 13 basis points. Averaging 5.77% Tuesday, the Jumbo 30-year average is now a half percentage point under its 6.27% reading last month, which was the most expensive Jumbo 30-year mark in 12 years.

Tuesday’s refinancing rates moved somewhat similarly compared to their new purchase counterparts. The 30-year refi average gained seven basis points and the 15-year average, 13 points, while the Jumbo 30-year refi average dropped an eighth of a percentage point. The cost to refinance with a fixed-rate loan is currently up to 59 basis points more expensive than new purchase rates.

After a historical rate plunge in August 2021, mortgage rates skyrocketed in the first half of this year. Indeed, the 30-year average’s mid-June peak of 6.38% was almost 3.5 percentage points above its summer 2021 trough of 2.89%. But the surge this fall dramatically outdid the summer high, with late October’s 30-year average reaching 1.2 percentage points higher than the June peak.

Calculate monthly payments for different loan scenarios with our Mortgage Calculator.

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, in addition to individual lenders’ varying risk management strategies.

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 had kept the mortgage market relatively low for much of 2021. In particular, the Federal Reserve had been buying billions of dollars of bonds in response to the pandemic’s economic pressures. This bond-buying policy (and not the more publicized federal funds rate) is a major influencer on mortgage rates.

But starting last November, the Fed began tapering its bond purchases downward, making sizable reductions each month until reaching net-zero in March 2022.

The Fed’s rate and policy committee, called the Federal Open Market Committee (FOMC), meets every six to eight weeks. Their next scheduled meeting takes place December 13-14.

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.