Today's Mortgage Rates & Trends - January 7, 2022: Rates surge

30-year average shoots up to highest level since early weeks of the pandemic

Mortgage rates bolted upwards Thursday, with the flagship 30-year average jumping an eye-popping 15 basis points. Most averages now sit higher than at any point in 2021, and have returned to levels not seen since early in the pandemic.

National Averages of Lenders' Best Rates
Loan Type Purchase Refinance
30-Year Fixed 3.58% 3.69%
FHA 30-Year Fixed 3.47% 3.64%
Jumbo 30-Year Fixed 3.44% 3.62%
15-Year Fixed 2.67% 2.78%
5/1 ARM 3.25% 3.50%
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.
Mort ranges 2022.01.07

Today's National Mortgage Rate Averages

On the heels of the Federal Reserve releasing minutes from its most recent rate-setting meeting, mortgage rates exploded higher Thursday. The 30-year fixed-rate average climbed a whopping 15 basis points to 3.58%, which is almost two-tenths of a percentage point above its highest level of 2021. The average now matches highs not seen since April 2020, when the pandemic was still new.

The 15-year average also climbed substantially, by ten points to 2.67%, surpassing its 2021 high of 2.63%. And Jumbo 30-year rates climbed 12 basis points to 3.44%. Due to some recent notable declines, Jumbo 30-year rates are still below last year's high-water mark of 3.47%.

Compared to early August, when a major rate dip took most averages to five-month lows, the 30-year average is now almost 70 basis points more expensive, while the 15-year and Jumbo 30-year averages are up 46 and 38 points, respectively.

Refinance rates behaved similarly Thursday, with the 30-year refinance average rising by a sharp 12 points to 3.69%, which is now well above last year's high of 3.58%. The cost to refinance fixed-rate loans is currently 11 to 18 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 3.58% +0.15
FHA 30-Year Fixed 3.47% +0.18
VA 30-Year Fixed 3.51% +0.17
Jumbo 30-Year Fixed 3.44% +0.12
20-Year Fixed 3.38% +0.14
15-Year Fixed 2.67% +0.10
Jumbo 15-Year Fixed 3.19% No Change
10-Year Fixed 2.67% +0.11
10/1 ARM 3.46% +0.38
10/6 ARM 4.07% +0.23
7/1 ARM 3.16% +0.32
Jumbo 7/1 ARM 2.38% +0.04
7/6 ARM 4.25% +0.11
Jumbo 7/6 ARM 2.83% No Change
5/1 ARM 3.25% +0.76
Jumbo 5/1 ARM 2.23% +0.04
5/6 ARM 4.31% +0.20
Jumbo 5/6 ARM 2.86% +0.13
National Averages of Lenders' Best Rates - Refinancing
Loan Type Refinance Daily Change
30-Year Fixed 3.69% +0.12
FHA 30-Year Fixed 3.64% +0.13
VA 30-Year Fixed 3.80% +0.15
Jumbo 30-Year Fixed 3.62% +0.12
20-Year Fixed 3.52% +0.16
15-Year Fixed 2.78% +0.11
Jumbo 15-Year Fixed 3.37% No Change
10-Year Fixed 2.80% +0.13
10/1 ARM 4.02% +0.17
10/6 ARM 4.25% +0.08
7/1 ARM 3.77% +0.27
Jumbo 7/1 ARM 2.67% +0.05
7/6 ARM 4.31% -0.03
Jumbo 7/6 ARM 3.11% No Change
5/1 ARM 3.50% +0.31
Jumbo 5/1 ARM 2.52% +0.05
5/6 ARM 4.54% +0.20
Jumbo 5/6 ARM 3.04% +0.13

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.