Today's Mortgage Rates & Trends - January 20, 2022: Rates continue climb

Mortgage averages add another uptick to already double-digit increases this week

With 10-Year Treasury yields climbing to a two-year high this week, mortgage rates have followed suit, jumping by double digits Tuesday and ascending another few points Wednesday. The flagship 30-year average has already risen 14 basis points this week and is at its highest level since early in the pandemic.

National Averages of Lenders' Best Rates
Loan Type Purchase Refinance
30-Year Fixed 3.82% 3.94%
FHA 30-Year Fixed 3.80% 4.12%
Jumbo 30-Year Fixed 3.63% 3.67%
15-Year Fixed 3.03% 3.14%
5/1 ARM 3.34% 3.86%
National averages of the lowest rates offered by more than 200 of the country's top lenders, with a loan-to-value ratio (LTV) of 80%, an applicant with a FICO credit score of 700-760, and no mortgage points.
2022.01.20 mort ranges

Today's National Mortgage Rate Averages

The story of mortgage rates in 2022 has been one of dramatic increases, and Wednesday saw averages climb higher still. Adding another two basis points to 3.82%, the 30-year fixed-rate average is now 43 basis points more expensive than its top average of 2021, and matches its highest level since March 2020.

Rates on 15-year loans have followed a similar path this year, and rose one point Wednesday after breaking through the 3-percent threshold Tuesday. Like the 30-year average, the 15-year average is the highest we've seen since spring 2020.

Meanwhile, the Jumbo 30-year rate had shown fewer dramatic surges this year, and was still sitting under last year's high-water mark as recently as Friday. But with three points added Wednesday, after a tenth of a point gain on Tuesday, the Jumbo 30-year average is up to 3.63%, putting it well above its 2021 high of 3.47%.

Compare that to early August, when a major rate dip took most averages to five-month lows. Today's rates are substantially higher, with the 30-year average 93 basis points more expensive, while the 15-year and Jumbo 30-year averages are up 82 and 57 points, respectively.

Refinance rates behaved similarly Wednesday, with the 30-year average rising three basis points. Like new purchase rates, the 30-year and 15-year refinance averages have moved well above their 2021 highs, though the Jumbo 30-year refinance average is still cheaper. The cost to refinance fixed-rate loans is currently 4 to 12 points higher than new purchase loans.

Important:

The rates you see here generally won’t compare directly with teaser rates you see advertised online, since those rates are cherry-picked as the most attractive. They may involve paying points in advance, or may be selected based on a hypothetical borrower with an ultra-high credit score or taking a smaller-than-typical loan given the value of the home.

National Averages of Lenders' Best Rates - New Purchase
Loan Type New Purchase Daily Change
30-Year Fixed 3.82% +0.02
FHA 30-Year Fixed 3.80% +0.05
VA 30-Year Fixed 3.85% -0.01
Jumbo 30-Year Fixed 3.63% +0.03
20-Year Fixed 3.62% +0.03
15-Year Fixed 3.03% +0.01
Jumbo 15-Year Fixed 3.32% +0.01
10-Year Fixed 2.99% -0.01
10/1 ARM 4.01% +0.30
10/6 ARM 4.52% +0.03
7/1 ARM 3.78% +0.36
Jumbo 7/1 ARM 2.56% +0.10
7/6 ARM 4.39% No Change
Jumbo 7/6 ARM 2.78% No Change
5/1 ARM 3.34% +0.11
Jumbo 5/1 ARM 2.41% +0.10
5/6 ARM 4.17% +0.10
Jumbo 5/6 ARM 2.78% -0.08
National Averages of Lenders' Best Rates - Refinancing
Loan Type Refinance Daily Change
30-Year Fixed 3.94% +0.03
FHA 30-Year Fixed 4.12% +0.06
VA 30-Year Fixed 4.29% +0.10
Jumbo 30-Year Fixed 3.67% No Change
20-Year Fixed 3.81% +0.04
15-Year Fixed 3.14% +0.01
Jumbo 15-Year Fixed 3.50% No Change
10-Year Fixed 3.10% No Change
10/1 ARM 4.15% +0.08
10/6 ARM 4.88% -0.02
7/1 ARM 3.92% +0.08
Jumbo 7/1 ARM 2.86% +0.10
7/6 ARM 4.79% +0.24
Jumbo 7/6 ARM 3.05% No Change
5/1 ARM 3.86% +0.27
Jumbo 5/1 ARM 2.70% +0.10
5/6 ARM 4.30% +0.18
Jumbo 5/6 ARM 2.94% -0.10

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, as well as individual lenders' varying risk management strategies.

These rates are surveyed directly from over 200 top lenders.

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 have kept the mortgage market relatively low for much of this year. In particular, the Federal Reserve has been buying billions of dollars of bonds in response to the pandemic's economic pressures, and continues to do so. This bond-buying policy (and not the more publicized federal funds rate) is a major influencer on mortgage rates.

On Dec. 15, the Fed announced that, in light of stronger and more persistent inflation pressure than originally expected, it will speed up its timeline for throttling Fed bond buying, reducing the amount they purchase by a larger increment each month than initially planned. This so-called taper began in late November.

The Fed's rate and policy committee, called the Federal Open Market Committee (FOMC), meets every 6-8 weeks. Their next scheduled meeting will be held Jan. 25-26.

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.