Today's Mortgage Rates & Trends - March 21, 2023: Rates Dip Lower

The 30-year mortgage average edged down for a fourth day Monday. Shaving off another few basis points, the flagship average has declined two-tenths of a point across the last four days. Most other mortgage averages were also down or held steady.

Today's National Mortgage Rate Averages

Rates on 30-year loans subtracted another four basis points Monday, after giving up a cumulative 16 points the previous three days. That lowers the average to 6.77%, its cheapest level since February 10. Thirty-year rates have been moving between the bookends of a five-month low of 6.11% enjoyed in very early February and October's historic 20-year peak of 7.58%.

The 15-year average showed no change Monday, holding at 5.94%. Last week marks the first time 15-year rates have averaged below 6% since February 9. The current average is 1.09 percentage points cheaper than the 15-year high of 7.03% seen in October, but still well above the 5.23% low point registered in the first days of February.

Jumbo 30-year rates dropped a notable eighth of a percentage point Monday, lowering to a 5.64% average. It's their cheapest level since mid-February, and is two-thirds of a point under October's 12-year high of 6.27%.

Monday's refinancing rates moved the other way for 30-year loans, climbing six basis points. Like their new purchase counterparts, the 15-year refi average was flat and Jumbo 30-year refi rates gave up an eighth of a point. The cost to refinance for 30 years is currently 41 basis points more expensive than new purchase rates.

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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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 November 2021, 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.