Today's Mortgage Rates & Trends - January 31, 2023: Rates flat

Thirty-year mortgage rates held almost still Monday, inching up minimally. That keeps the 30-year average in a narrow range of a few points above and below 6.4%, where it is has wavered for almost a week.

Today's National Mortgage Rate Averages

Rates on 30-year mortgages edged up a single basis point Monday, nudging the flagship average to 6.43%. For the last four days, rates have bobbed around the 6.4% mark, and since January 10, have moved between 6.25% and 6.51%. Rates on 30-year loans are currently 1.15% lower than the 7.58% average notched in October, a 20-year high.

Monday's 15-year average climbed a bit more, but by a modest four basis points. The current 15-year average of 5.48% is more than 1.5% below its October peak of 7.03%, its highest average since 2007.

After remaining flat for two days, Jumbo 30-year rates rose an eighth of a percentage point Monday. The new average of 5.52% is three-quarters of a point cheaper than its 12-year high of 6.27%, also registered in October.

Refinancing rates moved almost identically to new purchase rates Monday, with the 30-year refi average holding steady, the 15-year refi average climbing a minor three basis points, and Jumbo 30-year refi rates rising an eighth of a point. The cost to refinance for 30 years is currently 19 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.