Today's Mortgage Rates & Trends - December 23, 2022: Rates rise

Rates on 30-year mortgages were back on the rise Thursday, jumping back into the upper-mid 6% range. The flagship average has been in a yo-yo pattern since the beginning of the month that has seen it dip below and rise above the 6.5% mark.

Today's National Mortgage Rate Averages

In a third consecutive day of double-digit movements, 30-year mortgage rates jumped 14 basis points Thursday, reaching back up to a 6.68% average. The 30-year average has bobbed around between 6.40% and 6.75% since the start of December, after notching a 20-year high of 7.58% in October.

The 15-year average also rose Thursday, but by a more modest six basis points. Now at 5.98%, the average is still 1.05% cheaper than its 7.03% fall peak, which was its highest reading in more than 15 years.

Jumbo 30-year rates were meanwhile flat Thursday, holding at 5.77%. That average is half of a point below the average's October high of 6.27%, a level not previously seen since 2010.

Refinancing rates for 30-year loans climbed more dramatically Thursday than their new purchase counterparts, with the 30-year refi average bolting 30 basis points higher. In contrast, the 15-year refi average rose a minor three basis points and Jumbo 30-year refi rates held steady. The cost to refinance for 30 years is now 59 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.

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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 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 will conclude February 1.

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.