Today's Mortgage Rates & Trends - July 1, 2022: Rates sink

30-year average plunges to lowest level in three weeks

Mortgage rates saw big declines Thursday, with the 30-year average shedding more than two-tenths of a percentage point to land at its lowest level in three weeks. That's after re-entering the 6% range earlier in the week.

National Averages of Lenders' Best Rates
Loan Type Purchase Refinance
30-Year Fixed 5.80% 5.98%
FHA 30-Year Fixed 5.67% 6.03%
Jumbo 30-Year Fixed 5.07% 5.15%
15-Year Fixed 4.97% 5.25%
5/1 ARM 4.47% 4.74%
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.
2022.07.01 mort ranges

Today's National Mortgage Rate Averages

Rates on 30-year loans dropped decidedly below the 6% threshold Thursday, with a 21-basis point decline that lowered the average to 5.80%, its lowest level since June 9. Two weeks ago, the flagship average registered a 14-year peak of 6.38%.

The 15-year average dropped even more precipitously Thursday, plummeting below the 5% threshold. The three-tenths of a percentage point decline took the 15-year average to 4.97%. Like 30-year loans, 15-year rates reached their highest level since 2008 two weeks ago, when they reached 5.41%.

Meanwhile, Jumbo 30-year rates dropped 12 basis points Thursday, landing at 5.07%. Any Jumbo 30-year average above 5% is still notable, however, as the average hadn't previously exceeded that threshold in over ten years.

After a major rate dip last summer, mortgage rates skyrocketed through early May, but then eased lower for the remainder of that month. Then June spiked the 30-year average an eye-popping 2.91 percentage points above its August 2021 low of 2.89%.

Meanwhile, the 15-year and Jumbo 30-year averages are currently 2.76 and 2.01 percentage points higher, respectively, than their summer 2021 valleys.

Refinancing averages moved similarly Thursday, with the 30-year refi average shedding 31 basis points, the 15-year average losing 26 points, and Jumbo 30-year refi rates dropping an eighth of a percentage point. The cost to refinance with a fixed-rate loan is currently eight to 36 points more expensive 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 5.80% -0.21
FHA 30-Year Fixed 5.67% -0.39
VA 30-Year Fixed 5.66% -0.44
Jumbo 30-Year Fixed 5.07% -0.12
20-Year Fixed 5.52% -0.33
15-Year Fixed 4.97% -0.30
Jumbo 15-Year Fixed 4.94% -0.13
10-Year Fixed 5.00% -0.37
10/1 ARM 4.89% -0.14
10/6 ARM 5.77% -0.09
7/1 ARM 4.77% -0.12
Jumbo 7/1 ARM 4.33% -0.11
7/6 ARM 5.79% -0.19
Jumbo 7/6 ARM 4.74% -0.12
5/1 ARM 4.47% -0.12
Jumbo 5/1 ARM 4.26% -0.16
5/6 ARM 5.66% -0.10
Jumbo 5/6 ARM 4.73% -0.13
National Averages of Lenders' Best Rates - Refinance
Loan Type Refinance Daily Change
30-Year Fixed 5.98% -0.31
FHA 30-Year Fixed 6.03% -0.27
VA 30-Year Fixed 6.26% -0.08
Jumbo 30-Year Fixed 5.15% -0.13
20-Year Fixed 5.80% -0.35
15-Year Fixed 5.25% -0.26
Jumbo 15-Year Fixed 5.02% -0.13
10-Year Fixed 5.34% -0.24
10/1 ARM 5.19% -0.13
10/6 ARM 5.93% -0.20
7/1 ARM 5.04% -0.14
Jumbo 7/1 ARM 4.56% -0.11
7/6 ARM 6.01% -0.17
Jumbo 7/6 ARM 4.92% -0.12
5/1 ARM 4.74% -0.13
Jumbo 5/1 ARM 4.53% -0.14
5/6 ARM 5.87% -0.18
Jumbo 5/6 ARM 4.81% -0.12

Calculate monthly payments for different loan scenarios with our Mortgage Calculator.

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 May 4, the Fed announced that it will begin reducing its balance sheet on June 1. Identical sizable reductions will occur in June, July, and August, and then be doubled beginning in September. This will be on top of its existing move to reduce new bond purchases by an increment every month, the so-called taper, which began in November.

The Fed's rate and policy committee, called the Federal Open Market Committee (FOMC), meets every 6-8 weeks. Their next scheduled meeting takes place July 26-27.

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.