Today's Mortgage Rates & Trends - March 22, 2023: Rates Jump

Rates on 30-year mortgages changed course Tuesday. After dropping four days in a row, the flagship average has jumped an eighth of a percentage point higher. Increases were seen across all major mortgage types, with virtually every average gaining by double digits.

Today's National Mortgage Rate Averages

After dropping 20 basis points over the previous four days, the 30-year mortgage average reclaimed 13 basis points Tuesday, raising the average back up to 6.90%. For the last six months, 30-year rates have been oscillating between the five-month low of 6.11% in early February and October's historic 20-year peak of 7.58%.

The 15-year average jumped similarly Tuesday, gaining 14 basis points to reach 6.08%. The average is currently 0.95 percentage points cheaper than the 15-year high of 7.03% seen in October, while sitting well above the 5.23% low point registered in the first days of February.

Meanwhile, Jumbo 30-year rates Tuesday added back the same eighth of a point they subtracted the day before, returning the average to 5.77%. That leaves Jumbo 30-year rates half a percentage point under October's 12-year high of 6.27%.

Refinancing rates moved fairly similarly to new purchase rates Tuesday. The 30-year refi average shot up 15 basis points, the 15-year average gained nine points, and Jumbo 30-year refi rates added an eighth of a point. The cost to refinance for 30 years is currently 43 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.