Mortgage Rates Below Recent Peak

After spiking to a historic 22-year high last week, 30-year mortgage rates eased a bit, and have rested there. The 30-year average was flat Wednesday, with the rate average for every other loan type but one also essentially steady.

The latest 30-year fixed-rate average is 7.70%. Since rates vary widely across lenders, it's always smart to shop around for your best mortgage option and compare rates regularly, no matter what type of loan you're in the market for.

Today's Mortgage Rate Averages: New Purchase

Rates on 30-year new purchase mortgages marked time Wednesday, holding at a 7.70% average. That's a tenth of a point below the reading a week ago, and 14 basis points cheaper than the historic peak notched later in the week. When the flagship average climbed to 7.84% last Thursday, it was the highest level reached since 2001.

Rates on 15-year loans gave up a minor 2 basis points Wednesday, dipping to 7.13%. The current average is holding not far below the 7.17% peak reached in August, which was a 21-year high.

Yet again, the jumbo 30-year average was flat Wednesday, holding for a sixth consecutive day at 6.90%. Daily jumbo averages are not available before 2009, but it's fair to assume August's jumbo 30-year peak of 7.02% was also the most expensive level reached in at least 20 years.

Every other new purchase average except one also marched mostly in place Wednesday. The only average to move more than 2 basis points was the FHA 15-year average, which sank 15 basis points.

Today's Mortgage Rate Averages: Refinancing

Refinancing averages were a bit more mixed than their new purchase cousins Wednesday. The 30-year refi average climbed 7 basis points, stretching the gap between 30-year new purchase and refi rates to 41 basis points. The 20-year refi average also gained, tacking on 3 basis points.

The 15-year and jumbo 30-year refi averages held steady for a second day, while the biggest refi rate movement was seen for FHA 15-year and 5/6 ARM loans, which subtracted 5 and 6 basis points, respectively.

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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 is a major influencer on 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.

The federal funds rate, which is set every six to eight weeks by the Fed's rate and policy committee—the Federal Open Market Committee (FOMC)—can also influence mortgage rates. However, it does not directly drive mortgage rates, and in fact, the fed funds rate and mortgage rates can move in opposite directions.

At its latest meeting, which concluded on July 26, the Fed hiked rates by a widely expected 25 basis points, raising the fed funds rate to a range of 5.25% to 5.50%. Fed Chairman Jerome Powell said that because inflation is still above the Fed's target rate of 2%, the rate-setting committee could either raise rates again or pause when it meets on Sept. 20, depending on economic conditions.

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.