Today's Mortgage Rates & Trends - January 30, 2023: Rates waver

Rates on 30-year mortgage edged slightly higher Friday. But the average still remains below 6.5%, in a quarter-point range its held for more than two weeks.

Today's National Mortgage Rate Averages

Friday saw 30-year mortgage rates climb a minor four basis points, raising the flagship average to 6.42%. Rates have been in a narrow yo-yo pattern since January 10, with daily averages ranging between 6.25% and 6.51%, with 6.25% being a four-month low. Rates on 30-year loans are currently 1.16% cheaper than the 7.58% average notched in October, a 20-year high.

The 15-year mortgage average rose a bolder 11 basis points Friday. Now averaging 5.44%, 15-year rates sit moderately above the recent four-month low of 5.26%. But current 15-year rates are still almost 1.6% below their October peak of 7.03%, the highest average since 2007.

Jumbo 30-year rates meanwhile marked time for a second day Friday, holding at 5.40%. The current average is seven-eighths of a percentage point lower than its 12-year high of 6.27%, also registered in October.

Friday's refinancing rates moved similarly to new purchase rates, with the 30-year refi average gaining an identical four basis points, the 15-year refi average climbing 15 points, and Jumbo 30-year refi rates again remaining flat. The cost to refinance for 30 years is currently 20 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 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.