Today's Mortgage Rates & Trends - February 7, 2023: Rates spike

Just three market days ago, 30-year mortgage rates sank to their lowest point since last summer. But with a large jump Monday, added onto an even heftier gain Friday, 30-year rates are now up to their most expensive level since early January.

Today's National Mortgage Rate Averages

The 30-year mortgage average jumped 24 basis points Monday. That's on top of a 29-point spike Friday, elevating the average more than half a percentage point since it dropped to 6.11% last Thursday. Monday's average of 6.64% is its highest mark since January 8. But compared to the 20-year high of 7.58% reached in October, 30-year rates are still almost a percentage point cheaper.

The 15-year average has surged even more, with a rise of 40 basis points Friday followed by another 21 basis points Monday. The current average of 5.84% is also its highest reading since early January. Still, 15-year rates current sit almost 1.2% below their October high average of 7.03%, a 15-year high.

Jumbo 30-year rates meanwhile added an eighth of a percentage point for the second day Monday. Now up to 5.64%, its most expensive mark since early January, the Jumbo 30-year average is five-eighths of a point cheaper than its 12-year high of 6.27%, also registered in October.

Refinancing rates moved very similarly to new purchase rates Monday. The 30-year refi average shot up 28 basis points, the 15-year average climbed 19 points, and Jumbo 30-year refi rates, 11 basis points. The cost to refinance for 30 years is currently 25 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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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.