Today’s Mortgage Rates & Trends – February 13, 2023: Rates spike

After surging more than a half percentage point a week ago and then mildly easing off, 30-year mortgage rates are back on the rise, tacking on almost two-tenths of a percentage point Friday to touch a five-week high.

Today’s National Mortgage Rate Averages

The 30-year mortgage average jumped 18 basis points Friday to hit 6.74%, its highest level since January 5. Just over a week ago, the flagship average had sunk to a five-month low of 6.11%. Though currently elevated, the 30-year average is almost seven-eighths of a percentage point lower than October’s peak of 7.58%, a 20-year high.

Friday’s rates on 15-year loans also moved notably higher, breaking through the 6% threshold for the first time in more than five weeks. Rising 11 basis points, the 15-year average is now 6.03%. Still, the current level is a full percentage point cheaper than the 15-year high average of 7.03%, notched in October.

Meanwhile, the Jumbo 30-year average continues to yo-yo by an eighth of a point, this time climbing 12 basis points to return to 5.64%. The Jumbo 30-year average has bobbed between 5.40% and 5.64% for more than a month, and the current average is almost two-thirds of a point cheaper than its 12-year high of 6.27%, also registered in October.

Friday’s refinancing rates climbed fairly similarly to new purchase rates, with the 30-year refi average rising 17 basis points, the 15-year refi average gaining nine points, and Jumbo 30-year refi rates adding 12 points. The cost to refinance for 30 years is currently 21 basis points more expensive than 30-year new purchase loans.

After a historical rate plunge in August 2021, mortgage rates skyrocketed in the first half of 2022. 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 in September and October dramatically outdid the summer high, with the 30-year average ultimately reaching 1.2 percentage points higher than the June peak.

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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, 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 will conclude March 22.

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.