Mortgage rates started the week with a yawn, with most averages moving a single basis point or two. The 30-year average is currently sitting notably below its recent 13-year peak.
Today’s National Mortgage Rate Averages
After giving up ground last week, the 30-year average edged barely upwards Monday, tacking on just two points to 5.43%. The average is now 33 basis points below its recent 13-year peak of 5.76%.
The 15-year average similarly moved a tiny increment, gaining a single point to register at 4.64%. Like 30-year loans, 15-year rates registered their highest level since 2009 in early May. But the average now sits more than half a percentage point under that 5.16% high.
Meanwhile, Jumbo 30-year rates moved more boldly, and in the other direction. Sinking 13 points, Monday’s Jumbo 30-year average was 4.69%. Unlike conventional 30-year and 15-year rates, the Jumbo 30-year average has not surpassed the April 2020 spike it experienced early in the pandemic.
Despite the recent fallback, all three averages had rocketed higher over the last nine months. Compared to the rate valley enjoyed last summer when a major dip dramatically sank rates, the 30-year average is currently an eye-popping 2.54 percentage points more expensive than the August low point, while the 15-year and Jumbo 30-year averages are up 2.43 and 1.63, respectively.
Refinance rates moved almost identically Monday, with the 30-year refi average adding three basis points, the 15-year average inching up a single point, and Jumbo 30-year refi rates dropping a full eighth of a percentage point. The cost to refinance with a fixed-rate loan is currently up to 57 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.
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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 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.