Today's Mortgage Rates & Trends - March 31, 2023: Rates Dip

After increasing 2 points on Wednesday, the 30-year fixed mortgage rate dipped 5 basis points yesterday, to 6.77%. All other fixed-term mortgage averages decreased slightly as well with the exception of the jumbo 15-year fixed rate, which remained unchanged at 5.90%.

Today's National Mortgage Rate Averages

The average rate for a 30-year fixed-rate mortgage reversed course Thursday, dipping slightly to 6.77%. The flagship rate remains considerably lower than the 20-year peak of 7.58% reached in October but it has risen notably since last month when the rate was as low as 6.11%.

Rates on 15-year fixed-rate home loans eased slightly yesterday as well, dropping 4 basis points to 6.01%. The 15-year average has tacked on 26 basis points in the past week, though, 78 basis points above its 5.23% low point reached last month.

The jumbo 30-year mortgage rate average decreased 13 basis points yesterday, erasing the 13 basis point jump experienced on Wednesday. It returned to being a half percent cheaper than October's 12-year-high average of 6.27%.

Refinancing rates decreased in similar amounts as those for purchase rates, also showing a 13-point decrease in the jumbo 30-year refi rates, offsetting the same magnitude of increase seen on Wednesday. The cost of a 30-year fixed-rate refinance stands at 25 basis points more expensive relative to the 30-year fixed purchase rate.

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 mortgage 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 in 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 on May 3, 2023.

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.