Today's Mortgage Rates & Trends - February 14, 2023: Rates rise further

Rates were up Monday for almost every mortgage type, with many averages rising by double digits for a second day. The 30-year average gained almost another tenth of a point, elevating it to an almost six-week high.

Today's National Mortgage Rate Averages

Monday's 30-year rates rose another nine basis points to average 6.83%. Adding to Friday's 18-point gain, the flagship average is at its highest level since the first few days of 2023. This comes close on the heels of dipping to a five-month low of 6.11% earlier this month. Compared to October's 20-year high of 7.58%, however, the current average is still three-quarters of a percentage point cheaper.

Rates on 15-year loans rose more substantially Monday, jumping 15 basis points to register a new five-week high of 6.18%. Still, the current 15-year average is almost seven-eighths of a point below the 7.03% peak touched in October, which was a 15-year high.

Jumbo 30-year rates also moved moderately higher Monday. Adding 13 basis points to reach 5.77%, the Jumbo 30-year average has left the 5.40% to 5.64% range for the first time since early January. The current average is now just a half percentage point cheaper than its 12-year high of 6.27%, also registered in October.

Refinancing rates rose similarly to new purchase rates Monday. The 30-year refi average added six basis points, the 15-year average climbed a bolder 16 points, and Jumbo 30-year refi rates gained 13 points. The cost to refinance for 30 years is currently 18 basis points more expensive than 30-year new purchase loans.

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 in 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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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 will conclude March 22.

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.