Today's Mortgage Rates & Trends - January 25, 2023: Rates steady

Fixed mortgage rates showed little movement Tuesday. The 30-year average dipped by a minor two basis points, keeping near the 6.5% threshold and within its range of the last two weeks.

Today's National Mortgage Rate Averages

After Monday crossing back over the 6.5% mark for the first time in two weeks, 30-year rates eased just under the threshold Tuesday. The flagship average shed two basis points to lower to 6.49%. That's above last week's four-month low of 6.25%, but is still 1.09% cheaper than October's 20-year high of 7.58%.

The 15-year average was meanwhile flat Tuesday, holding at 5.49%. That's almost a quarter point above Friday's 5.26%, the average's lowest point in over four months. Rates on 15-year loans are currently more than 1.5 percentage points below the 7.03% high they notched in October, a high-water mark since 2007.

Jumbo 30-year rates also remained steady Tuesday. Holding at 5.52%, the current average is three-quarters of a percentage point below its 12-year high of 6.27%, also registered in October.

Refinancing rates showed slightly little more movement Tuesday, with the 30-year refi average shedding a larger six basis points, and the 15-year refi average climbing five basis points. Refinancing rates on Jumbo 30-year loans were essentially flat with just a single-point rise on average. The cost to refinance for 30 years is currently 31 basis points pricier 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 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.