After many small increases for the past week, the 30-year average dramatically rose more than an eighth of a percentage point Thursday, taking it close to the 13-year peak it notched in early May.
Today’s National Mortgage Rate Averages
Rates on 30-year mortgages inched up by one point Wednesday to an average of 5.58%, which is 35 points higher than its average after the Memorial Day weekend. However, that remains almost two-tenths of a percentage point under the 5.76% peak it registered May 2, which was its highest average since 2009.
Rates on 15-year loans climbed a bit more Wednesday, gaining three basis points to reach 4.77%. As with 30-year loans, early May saw the 15-year average registering its highest level in 13 years. But the current average is 39 points below that 5.16% high.
Meanwhile, Jumbo 30-year rates marked time Wednesday, holding at 4.82%. Unlike conventional 30-year and 15-year rates, this year’s Jumbo 30-year peak never surpassed the April 2020 spike it experienced early in the pandemic.
Through early May, all three averages had skyrocketed since last summer, when a major dip dramatically sank rates. At its peak this year, the 30-year average had risen an eye-popping 2.87 percentage points above its August 2021 low point of 2.89%.
Even given May’s retreat, 30-year rates are still 2.69 percentage points higher than last summer’s valley, while the 15-year and Jumbo 30-year averages are 2.56 and 1.76 percentage points higher, respectively.
Wednesday’s refinancing averages moved somewhat similarly, with the 30-year refi average climbing three points and the 15-year average, four points, while Jumbo 30-year refi rates remained flat. The cost to refinance with a fixed-rate loan is currently eight to 35 points more expensive than new purchase loans.
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 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, 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 May 4, the Fed announced that it will begin reducing its balance sheet on June 1. Identical sizable reductions will occur in June, July, and August, and then be doubled beginning in September. 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 June 14-15.
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.