Today's Mortgage Rates & Trends - February 22, 2023: Rates climb higher

Another jump in 30-year mortgage rates has again taken the flagship average above the 7% threshold and set a new high for this year. Many other mortgage averages also climbed substantially Tuesday, building on a climb that's continued for almost two weeks.

Today's National Mortgage Rate Averages

Rates on 30-year loans have risen back into 7% territory, with the average adding another nine basis points to register at 7.04%. Tuesday's climb adds to a string of recent increases that has elevated the 30-year average by almost a half percentage point since February 9. Additionally, the average had hit five-month low of 6.11%, almost a full point under the current average, as recently as February 2. Compared to the 20-year high of 7.58% reached in October, however, the current average is still more than half a percentage point cheaper.

The 15-year average moved similarly Tuesday, tacking on eight basis points to rise to 6.32% and touching its highest average since early November. Still, current rates are about seven-tenths of a point below their 15-year high average of 7.03% that was notched in October.

Jumbo 30-year rates also rose notably Tuesday. Jumping an eighth of a point, the Jumbo 30-year average is up to 6.02%, which matches its high-water mark of the last three months. The current average is now only a quarter point under its October peak of 6.27%, which was a 12-year high.

Tuesday's refinancing rates for 30-year and 15-year loans moved up even more than new purchase rates, with the 30-year refi average spiking 15 basis points and the 15-year refi average jumping 13 points. The Jumbo 30-year refi average rose an eighth of a point like its new purchase counterpart. The cost to refinance for 30 years is currently 33 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.