Today's Mortgage Rates & Trends - April 21, 2023: Rates Retreat

The four-day ascent that most mortgage averages were riding from last week into this one has ended, with a notable step back for every non-jumbo average Thursday. The decline takes the 30-year average back under 7%, while all jumbo averages held their ground.

Today's National Mortgage Rate Averages

Rates on 30-year loans dropped a tenth of a point on average Thursday, slicing off part of the 44-point gain they saw over the previous four days. After Wednesday reaching back above 7% for the first time in six weeks, the flagship average is back down to 6.93%, continuing to waver between February's five-month low of 6.11% and October's 20-year high of 7.58%.

The 15-year rate average gave up a slightly lesser 8 basis points, subtracting from its own four-day rise of 43 points. Dropping back to 6.22%, the 15-year average also continues moving between a five-month February low and an October high, bookended by 5.23% and 7.03%.

Jumbo 30-year rates meanwhile marked time Thursday. Reaching above 6% Wednesday for the first time since March 13, the jumbo 30-year average is at 6.02%, only a quarter point below its October's 12-year-high of 6.27%.

Thursday's non-jumbo refinancing rates moved a bit more boldly than new purchase rates, with the 30-year refi average dropping a more dramatic 19 basis points and the 15-year refi average declining 10 points. Like new purchase averages, rates on all jumbo refi products held firm. The cost to refinance for 30 years is currently 32 basis points more expensive than 30-year new purchase rates.

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 last 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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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 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 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, called the Federal Open Market Committee (FOMC), meets every six to eight weeks. Their next scheduled meeting will conclude on May 3, 2023.

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.