Today's Mortgage Rates & Trends - December 16, 2022: Rates dip again

30-year average yo-yos, dropping back below 6.5%

MR1216

Mortgage rates continued their up-and-down pattern Thursday, straddling the 6.5% mark the past two weeks. The 30-year average's latest dip of about a tenth of a point takes the flagship average to its lowest level in three months.

National Averages of Lenders' Best Rates
Loan Type Purchase Refinance
30-Year Fixed 6.40% 6.72%
FHA 30-Year Fixed 6.76% 7.23%
Jumbo 30-Year Fixed 5.64% 5.65%
15-Year Fixed 5.76% 5.97%
5/6 ARM 6.86% 7.00%
National averages of the lowest rates offered by more than 200 of the country's top lenders, with a loan-to-value ratio (LTV) of 80%, an applicant with a FICO credit score of 700–760, and no mortgage points.
2022.12.16

Today's National Mortgage Rate Averages

Though 30-year rates climbed slightly Wednesday, they erased that rise and dropped lower Thursday. Rates on 30-year loans gave up nine basis points to take the average to 6.40%, its lowest reading since September 15. The average is currently 1.18% under October's 20-year high of 7.58%.

Fifteen-year rates also declined. Shedding a more modest five basis points, Thursday's 15-year average dipped to 5.76%. That's 1.27% lower than its recent high-water mark of 7.03%, which was the highest average recorded in 15 years.

The Jumbo 30-year average meanwhile remained flat for a second day, holding Thursday at 5.64%. Though not as far under its fall peak as the 30-year and 15-year averages, Jumbo 30-year rates are reading two-thirds of a percentage point cheaper than their October high of 6.27%, a level not previously seen since 2010.

Thursday's refinancing rates moved mostly in line with new purchase rates, though the 30-year refi average dropped a bolder 13 basis points. The 15-year refi average gave up six points and Jumbo 30-year refi rates again held steady. The cost to refinance for 30 years is currently 32 basis points more expensive than a new purchase 30-year loan.

After a historical rate plunge in August 2021, mortgage rates skyrocketed in the first half of this year. 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 this fall dramatically outdid the summer high, with late October's 30-year average reaching 1.2 percentage points higher than the June peak.

The rates you see here generally won’t compare directly with teaser rates you see advertised online, since those rates are cherry-picked as the most attractive. They may involve paying points in advance, or they may be selected based on a hypothetical borrower with an ultra-high credit score or taking a smaller-than-typical loan given the value of the home.

National Averages of Lenders' Best Rates - New Purchase
New Purchase Daily Change
30-Year Fixed 6.40% -0.09
FHA 30-Year Fixed 6.76% -0.13
VA 30-Year Fixed 6.71% -0.13
Jumbo 30-Year Fixed 5.64% No change
20-Year Fixed 6.06% -0.03
15-Year Fixed 5.76% -0.05
Jumbo 15-Year Fixed 5.89% No change
10-Year Fixed 5.75% -0.04
10/6 ARM 6.78% +0.01
7/6 ARM 6.84% +0.06
Jumbo 7/6 ARM 5.61% +0.13
5/6 ARM 6.86% -0.01
Jumbo 5/6 ARM 5.69% +0.13
National Averages of Lenders' Best Rates - Refinance
Loan Type Refinance Daily Change
30-Year Fixed 6.72% -0.13
FHA 30-Year Fixed 7.23% -0.19
VA 30-Year Fixed 7.40% -0.04
Jumbo 30-Year Fixed 5.65% No change
20-Year Fixed 6.29% -0.16
15-Year Fixed 5.97% -0.06
Jumbo 15-Year Fixed 5.90% No change
10-Year Fixed 5.97% -0.05
10/6 ARM 6.93% +0.01
7/6 ARM 6.92% +0.05
Jumbo 7/6 ARM 5.69% +0.13
5/6 ARM 7.00% +0.04
Jumbo 5/6 ARM 5.69% +0.13

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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 last November, 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 takes place December 13-14.

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.