Today's Mortgage Rates & Trends - February 9, 2023: Rates waver

Rates on 30-year mortgages gave up a little more ground Wednesday. But after spiking to a one-month high at the start of this week, the flagship average is still elevated.

Today's National Mortgage Rate Averages

The 30-year mortgage average shed three basis points for a second day Wednesday, dipping to 6.58%. That's still almost half a percentage point more expensive than last week, when the average sank to a five-month low of 6.11%. But relative to the 20-year high of 7.58% reached in October, 30-year rates are still a full percentage point cheaper.

Rates on 15-year loans also inched downward Wednesday, declining a modest five basis points. The 15-year average had spiked 70 points earlier in the week, so Wednesday's 5.88% average is still in its highest range since early January. The 15-year average currently sits 1.15% below its mid-October average of 7.03%, a 15-year high.

The Jumbo 30-year average meanwhile moved the other way Wednesday, adding back an eighth of a percentage point to return to 5.64%. The Jumbo 30-year average has bobbed between 5.40% and 5.64% for the past month, and the current average is five-eighths of a point cheaper than its 12-year high of 6.27%, also registered in October.

Refinancing rates moved similarly to new purchase rates for 30-year loans Wednesday, with the 30-year refi average holding steady and the Jumbo 30-year refi average climbing an eighth of a point. But the 15-year refi average moved more substantially than its new purchase counterpart, shedding 12 basis points. The cost to refinance for 30 years is currently 28 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.