Today's Mortgage Rates & Trends - March 14, 2023: Rates Dip Further

Following on the heels of a major drop Friday, Monday's 30-year mortgage rates shaved off more basis points, lowering the flagship average to its cheapest level in about a month. Averages for most other mortgage types also dipped Monday.

Today's National Mortgage Rate Averages

Rates on 30-year mortgages added another decline Monday after sinking significantly Friday. Monday's average subtracted another seven basis points, creating a 36 basis point drop over just two days and reducing the average to 6.89%. It's the lowest level seen since Feb. 15. The average is sitting between the five-month low of 6.11% registered in early February and the historic 20-year peak of 7.58% notched in October.

The 15-year mortgage average dropped similarly, shedding nine basis points to rest at 6.16%. The 15-year average had climbed to 6.54% on March 2, a high since early November. Compared to the 15-year peak of 7.03% in October, the 15-year average is currently 87 basis points lower.

After holding at a four-month high for more than a week, Jumbo 30-year rates finally made a move Friday, but are now again marching in place. Monday's 6.02% average is just a quarter point below October's 12-year high of 6.27%.

Refinancing rates moved more substantially than new purchase rates for 30-year loans, with the 30-year refi average declining a notable 13 basis points. For 15-year and Jumbo 30-year refi loans, movement was identical to new purchase loans, with the 15-year average dipping nine points and the Jumbo 30-year refi average remaining flat. The cost to refinance for 30 years is currently 30 basis points more expensive than 30-year new purchase loans.

After a historical rate plunge in August 2021, mortgage rates skyrocketed in the first half of 2022. Indeed, the 30-year average's mid-June peak of 6.38% was almost 3.5 percentage points above its summer 2021 trough of 2.89%. But the surge in September and October dramatically outdid the summer high, with the 30-year average ultimately reaching 1.2 percentage points higher than the June peak.

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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, 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 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 had 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 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, called the Federal Open Market Committee (FOMC), meets every six to eight weeks. Their next scheduled meeting will conclude March 22.

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.