30-Year Mortgage Rates Jump by Double Digits

Rates on 30-year mortgages continue to yo-yo after spiking to a 22-year high earlier this month. Friday's 30-year average jumped by 16 basis points, reversing much of the large decline it saw in previous days last week. As a result, the current average is higher week-over-week, though it still sits a bit below its historic peak.

The latest 30-year fixed-rate average is 7.76%. Rates vary widely across lenders, so it's always smart to shop around for your best mortgage option and compare rates regularly, no matter what type of loan you're looking for.

Today's Mortgage Rate Averages: New Purchase

Rates on 30-year new purchase mortgages jumped 16 basis points Friday, rising to an average of 7.76%. That follows a four-day decline of 17 basis points, essentially returning the average at the end of the week to the same place it started the week. The flagship average now sits just 8 basis points below Sept. 7's historic reading of 7.84%—its highest mark since 2001.

Rates on 15-year loans rose a lesser 5 basis points Friday, erasing their dip of the previous day and returning the average to 7.13%. That pushes the 15-year average back to within a few basis points of its 7.17% peak, a 21-year high reached in mid-August.

The jumbo 30-year average held steady Friday at its high-water mark of 7.02%. Though daily jumbo averages are not available before 2009, it's reasonable to assume that August's peak average of 7.02% was the most expensive level reached for jumbo 30-year loans in at least 20 years.

Several other fixed-rate averages rose by double digits Friday, including FHA 30-year, VA 30-year, and 20-year loans. The only averages to decline were for FHA 15-year and 5/6 ARM loans, though the decreases were minimal.

Today's Mortgage Rate Averages: Refinancing

Friday's refinancing averages moved somewhat similarly to new purchase rates, with the 30-year refi average gaining 14 basis points. The current gap between the 30-year new purchase and refi averages is 35 basis points.

Refi rates for 15-year loans added a lesser 3 basis points Friday, while the jumbo 30-year refi average held steady at 7.02%, the same average as its new purchase sibling. The only refi average to dip Friday was for 5/6 ARM loans, which subtracted a minor 4 basis points.

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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.

The states with the lowest 30-year new purchase averages Thursday were Vermont, Mississippi, Delaware, Iowa, Louisiana, and North Dakota, while the states with the highest averages were Nevada, Minnesota, Arizona, Washington, Oregon, and Idaho.

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, especially 10-year Treasury yields
• The Federal Reserve's current monetary policy, especially as it relates to bond buying and funding government-backed mortgages
• 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 is a major influencer of mortgage rates.

But starting in Nov. 2021, the Fed began tapering its bond purchases downward, making sizable reductions each month until reaching net-zero in March 2022.

Since that time, the Fed has been aggressively raising the federal funds rate to fight decades-high inflation. While the fed funds rate can influence mortgage rates, it does not directly do so. In fact, the fed funds rate and mortgage rates can move in opposite directions.

However, given the historic speed and magnitude of the Fed's 2022 and 2023 rate increases—raising the benchmark rate a cumulative 5.25% over the last 18 months—even the indirect influence of the fed funds rate has resulted in an upward impact on mortgage rates over the last two years.

The Fed's next rate-setting meeting is scheduled to conclude Sept. 20, and financial markets have priced in a near-certainty that the central bank will hold rates steady this time. A rate increase in November or December is still a possibility, however, with traders forecasting odds of 35-40% of an increase being announced at one of those meetings.

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.