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Mortgage rates have taken big swings in both directions over the past week, with the latest installment being Friday’s double-digit drop across most averages.
Today’s National Mortgage Rate Averages
After shooting up 17 basis points Thursday, the 30-year average erased all that and more Friday, sinking 20 basis points to 4.05%. That’s compared to its recent peak of 4.28%, which is the highest average since May 2019.
Rates on 15-year loans also dropped Friday, but by a lesser 11 points, to 3.30%. Like 30-year rates, today’s 15-year average is about two-tenths of a point below its recent multi-year high of 3.49%.
Jumbo 30-year rates sat in the middle ground, shedding 15 basis points Friday, to 3.80%. The Jumbo average has generally shown less dramatic movements this year than the 30-year and 15-year averages, but has still added a third of a percentage point over its 2021 high.
All three averages have gotten much more expensive since a major August dip sank rates to five-month lows. The 30-year average is currently 1.16 percentage points more expensive than the August valley, while the 15-year and Jumbo 30-year averages are up 1.09 and 0.74, respectively.
Refinance rates behaved similarly Wednesday, with the 30-year refi average swinging 18 points lower, and the 15-year average, 15 points, while the Jumbo 30-year average plummeted 21 points. The cost to refinance with a fixed-rate loan is currently up to 10 points more expensive than new purchase loans.
Important:
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.
Calculate monthly payments for different loan scenarios with our Mortgage Calculator.
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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 Jan. 26, the Fed announced that, in light of stronger and more persistent inflation pressure than originally expected, it is sticking to its plan to speed up the timeline for throttling Fed bond buying, reducing the amount they purchase by a large increment each month. This so-called taper began in late 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 March 15-16.
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.