Today's Mortgage Rates & Trends - January 17, 2023: Rates hold

Rates on 30-year mortgages marked time Friday, after sinking two-thirds of a percentage point over the previous week. The average is currently sitting at its lowest point since mid-September.

Today's National Mortgage Rate Averages

Thirty-year mortgage rates were flat Friday, holding at 6.35%. Thursday was the first time the flagship average had registered below 6.40% since September 12, having plunged 64 basis points over the course of a week. The current average is now 1.23% cheaper than October's 20-year high of 7.58%.

The 15-year average was almost as flat Friday, giving up a minor three basis points and hitting a new four-month low of 5.41%. Rates on 15-year loans are now more than 1.6 percentage points below their fall peak of 7.03%, which was their highest level in 15 years.

Friday's Jumbo 30-year rates declined an eighth of a point for a second consecutive day, dropping the average to 5.40%, another four-month low. The Jumbo 30-year average is now seven-eighths of a percentage point under its 12-year high of 6.27%, also notched in October.

Refinancing rates were similarly steady Friday for 30-year loans, giving up a single basis point, while 15-year refi rates were down a larger eight points and Jumbo 30-year refi rates, 13 points. The cost to refinance for 30 years is now 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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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 February 1.

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.