Today’s Mortgage Rates & Trends – May 26, 2023: Rates Surge Again

For a ninth day out of ten, 30-year mortgage rates rose, with a Thursday spike that’s pushed the flagship average close to a 20-year high. It’s the most expensive mark we’ve seen for 30-year loans since mid-October.

Rates on 15-year mortgages also saw a major jump Thursday, extending a similar pattern of increases every day but one over the last ten market days. The average has now reached its highest level since early November.

Today’s National Mortgage Rate Averages

After hitting reverse for one day, rates on 30-year fixed mortgages were back on the rise Thursday with another big jump. Spiking another 17 basis points, the 30-year average has surged 71 basis points in the past two weeks. Now up to 7.53%, that’s just 5 basis points below the peak notched last October, which was the highest level for 30-year rates in 20 years.

Rates on 15-year loans have climbed very similarly. Rising 19 basis points Thursday, the 15-year average has skyrocketed almost a quarter percentage point since May 11, registering now at 6.63%. Unlike 30-year rates, however, the 15-year average is sitting more comfortably below its October peak, which was a 15-year high of 7.03%.

For an eighth consecutive day, the 30-year jumbo average held firm at 6.27%. That matches its highest point in almost 13 years. The only jumbo average to show movement Thursday was for 7/6 ARMs, which declined an eighth of a percentage point on average.

Refinancing rates moved less dramatically Thursday than their new purchase counterparts. The 30-year refi average added just 6 basis points, while the 15-year refi average gained 12 points. Jumbo 30-year refi rates again marched in place. With Thursday’s spike in 30-year new purchase rates and a lesser gain for refi rates, the gap between those averages has narrowed to 18 basis points.

After a historical rate plunge in August 2021, mortgage rates skyrocketed in the first half of 2022. The 30-year average shot to 6.38% by June 2022, which was more than double the rate of 2.89% seen just 10 months earlier. Then an even more dramatic surge in September and October 2022 outdid the June peak, with the 30-year average ultimately climbing another 1.2 percentage points and recording a 20-year high.

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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 type, 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 mortgage 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 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 in November 2021, 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—the Federal Open Market Committee (FOMC)—meets every six to eight weeks. The next scheduled meeting will conclude on June 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.