Today's Mortgage Rates & Trends - March 1, 2023: Rates rise again

The pullback on 30-year rates registered Monday was short-lived, with rates back up by the same increment Tuesday. That returns the flagship average back above 7% and to its highest level of the calendar year.

Today's National Mortgage Rate Averages

The 30-year mortgage average Tuesday added back the six basis points it subtracted the day before, returning the average to 7.05%, a 2023 high. Though rates are now 94 basis points above the five-month low of 6.11% that was recorded in early February, the current average is still about a half percentage point lower than the 20-year peak of 7.58% reached in October.

Rates on 15-year loans, meanwhile, moved the other way, shedding four basis points Tuesday to drop the average to 6.33%. That's still in a high range not seen since November, but is also 70 basis points cheaper than October's 15-year high of 7.03%.

Like standard 30-year rates, the Jumbo 30-year average added back its full Monday drop, gaining 13 basis points. Returned to 6.15%, the average again matches the highest reading since November 9, and compared to October's 12-year high of 6.27%, is only an eighth of a point lower.

Refinancing rates moved fairly similarly to new purchase rates Tuesday for 30-year and Jumbo 30-year loans, with the 30-year refi average rising four basis points and the Jumbo 30-year refi average, 13 points. The 15-year refi average moved much more substantially than its new purchase counterpart, sinking 15 basis points. The cost to refinance for 30 years is currently 32 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 March 22.

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.