Today's Mortgage Rates & Trends - April 4, 2023: Rates Dip

Rates on 30-year mortgages have been bobbing around in a range between 6.5% and 7% for more than three weeks. After four days of micro movements, the 30-year rate average dropped a tenth of a percentage point Monday, while almost every other average also dropped or held steady.

Today's National Mortgage Rate Averages

The 30-year fixed-rate average gave up 10 basis points Monday, for its first double-digit change in a week of minor yo-yo movements. Now down to 6.66%, the flagship average is in the lower third of a range bookended by October's 20-year high of 7.58% and early February's five-month low of 6.11%.

The 15-year loan average also declined Monday, but by a more modest 6 basis points. Dipping to 5.92%, rates on 15-year mortgages are at their cheapest level in more than a week, but still wavering between the 15-year high of 7.03% seen in October and the 5.23% low valley of February.

Jumbo 30-year rates held steady again Monday, marking a third day averaging 5.77%. That leaves the average half a percent cheaper than October's 12-year-high average of 6.27%.

Monday's refinancing rate moves were similar to the new purchase rate moves, though a bit milder. The 30-year refi average shed only 5 basis points and the 15-year refi average lost 4 points. Jumbo 30-year refi rates were once again flat like their new purchase counterparts. The cost to refinance for 30 years is currently 33 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.