Today's Mortgage Rates & Trends - December 27, 2022: Rates move higher

The 30-year mortgage average moderately rose again Friday, ending the week back near 6.75%. The average has been bobbing around between 6.40% and 6.76% since the beginning of this month.

Today's National Mortgage Rate Averages

Two days of increases to end the week raised the 30-year mortgage average back to its highest level since the end of November. A Friday increase of eight basis points pushed the average to 6.76%. Still, that's more than eight-tenths of a percentage point below October's 20-year high of 7.58%.

Rates on 15-year loans increased even more Friday, rising a full eighth of a percentage point to re-enter 6% territory. Averaging 6.11%, 15-year rates are currently 0.92% cheaper than the 7.03% fall peak, which was the highest average since 2007.

Friday's Jumbo 30-year rates also climbed an eighth of a point, rising to 5.90%. The higher average is now just 37 basis points below the average's October high of 6.27%, a level not previously seen in 12 years.

Refinancing rates climbed more substantially than new purchase rates Friday, with the 30-year refi average adding 11 basis points and the 15-year refi average jumping 22 points. The Jumbo 30-year refi average similarly added an eighth of a percentage point. The cost to refinance for 30 years is now 62 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.