Today's Mortgage Rates & Trends - March 2, 2023: Rates jump

Rates on 30-year mortgages added more than a tenth of a point Wednesday, taking the flagship average to its highest level since late December. Averages across most other loan types rose as well.

Today's National Mortgage Rate Averages

Wednesday's 30-year average jumped 11 basis points to hit a new two-month high of 7.16%. This latest boost builds on major increases throughout much of February. Indeed, 30-year rates have cumulatively tacked on more than a full percentage point since sinking to a five-month low of 6.11% exactly one month ago. The current 30-year average is now just 42 basis points below the 20-year peak of 7.58% reached in October.

Rates on 15-year loans climbed Wednesday as well, gaining seven basis points to raise the average to 6.40%. That's in a high range not seen since November, but is still 63 basis points cheaper than October's 15-year high of 7.03%.

For their part, Jumbo 30-year rates held steady Wednesday. Marking time at 6.15%, the current average matches its highest reading since early November, and compared to October's 12-year high of 6.27%, is only an eighth of a point lower.

Wednesday's refinancing rates moved more boldly than new purchase rates for 30-year and 15-year loans, with the 30-year refi average surging 17 basis points and the 15-year refi average, 18 points. Like its new purchase counterpart, the Jumbo 30-year refi average marched in place Wednesday. The cost to refinance for 30 years is currently 38 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.