Mortgage rates were moderately down Wednesday, with the 30-year average giving up almost a tenth of a percentage point. The flagship average has been bobbing in the 6.25% to 6.50% range for more than two weeks.
Today’s National Mortgage Rate Averages
Rates on 30-year mortgages dipped nine basis points on average Wednesday. Currently at 6.40%, the 30-year average has been wavering within a quarter-point range since January 10, including last week’s four-month low of 6.25%. Rates on 30-year loans are currently 1.18% cheaper than October’s 20-year high of 7.58%.
Rates on 15-year loans also declined Wednesday, subtracting 13 basis points to land at 5.36%, which sits a tenth of a point above Friday’s four-month low average of 5.26%. Rates on 15-year loans are currently 1.67% lower than the 7.03% peak they also notched in October, a high point since 2007.
Wednesday’s Jumbo 30-year rates similarly dropped an eighth of a percentage point. Now at 5.40%, the current average is seven-eighths of a percentage point below its 12-year high of 6.27%, also registered in October.
Refinancing rates on 30-year loans dipped more notably than new purchase rates Wednesday, shedding a bolder 18 basis points, while the 15-year refi average dropped ten points and the Jumbo 30-year refi average, 14 points. The cost to refinance for 30 years is currently 22 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.
The rates you see here generally won’t compare directly with teaser rates you see advertised online, since those rates are cherry-picked as the most attractive. They may involve paying points in advance, or they may be selected based on a hypothetical borrower with an ultra-high credit score or taking a smaller-than-typical loan given the value of the home.
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 February 1.
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.