Mortgage rate averages dropped further Tuesday, continuing a relatively steady downward march over the two-plus weeks since June 16, when the Federal Reserve announced an acceleration of its timeline to eventually trim government bond purchases, causing rates to spike.
|National Averages of Lenders' Best Rates|
|FHA 30-Year Fixed||2.94%||3.14%|
|Jumbo 30-Year Fixed||3.24%||3.51%|
Today's National Mortgage Rate Averages
The average on 30-year fixed-rate mortgages notched another decline Tuesday, dropping four more basis points to 3.09%. That's compared to the 3.24% spike seen after the Fed's June 16 announcement. The 15-year fixed-rate average similarly dropped, shedding three basis points to end the day at 2.35%.
Averages for most of the popular mortgage types are currently sitting a little above their 60-day low rate, though Jumbo 30-year rates set a new two-month low on Tuesday, at 3.24%.
Refinance loans were averaging 20 to 27 basis points higher than new purchase rates on fixed-rate loans, while 5/1 ARM refinancing currently carries a premium over new purchase rates of 55 points.
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|
|FHA 30-Year Fixed||2.94%||-0.02|
|VA 30-Year Fixed||2.96%||-0.03|
|Jumbo 30-Year Fixed||3.24%||-0.01|
|Jumbo 15-Year Fixed||2.89%||-0.03|
|Jumbo 7/1 ARM||2.21%||-0.02|
|Jumbo 7/6 ARM||2.54%||No Change|
|Jumbo 5/1 ARM||2.06%||-0.02|
|Jumbo 5/6 ARM||2.56%||No Change|
|National Averages of Lenders' Best Rates - Refinancing|
|Loan Type||Refinance||Daily Change|
|FHA 30-Year Fixed||3.14%||-0.01|
|VA 30-Year Fixed||3.25%||+0.01|
|Jumbo 30-Year Fixed||3.51%||-0.01|
|Jumbo 15-Year Fixed||3.08%||-0.02|
|Jumbo 7/1 ARM||2.45%||-0.03|
|Jumbo 7/6 ARM||2.90%||No Change|
|Jumbo 5/1 ARM||2.29%||-0.03|
|Jumbo 5/6 ARM||2.84%||No Change|
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.
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 the last two months. In particular, the Federal Reserve has been buying billions of dollars of bonds and continues to do so. This bond-buying policy (and not the more publicized federal funds rate) is a major influencer on mortgage rates.
But Fed policy could soon change. The Fed's rate and policy committee, called the Federal Open Market Committee (FOMC), meets every 6-8 weeks, and concluded their latest meeting June 16. Though they did not yet announce any changes to their bond-buying plans, they did indicate that a shift could come over the not-too-distant horizon. This forecasting language, without any actual change, is enough to move mortgage rates up.
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.