Today's Mortgage Rates & Trends - February 23, 2023: Rates mixed

After climbing almost a half percentage point over the past week and a half, the 30-year mortgage average edged slightly lower Wednesday, though it still sits at about 7%. The 15-year average moved the other way, however, setting a new three-month high.

Today's National Mortgage Rate Averages

The 30-year average gave up a minor three basis points Wednesday, easing slightly from its 2023 high of 7.04% the day before. Now at 7.01%, the average is notably above the five-month low of 6.11% it set just three weeks ago. 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.

Rates on 15-year loans meanwhile jumped higher Wednesday. Gaining another eight basis points, the 15-year average is up to 6.40%, its highest mark since November 10. Still, current rates are almost two-thirds of a point below their 15-year high average of 7.03% that was notched in October.

Jumbo 30-year rates marched in place Wednesday. Holding at 6.02%, the current Jumbo 30-year average matches its highest point of the last three months. The current average is now just a quarter point under its October peak of 6.27%, which was a 12-year high.

Refinancing rates moved similarly to new purchase rates Wednesday, with the 30-year refi average shedding six basis points, the 15-year refi average jumping eight points, and Jumbo 30-year refi rates holding steady. The cost to refinance for 30 years is currently 30 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.