Today's Mortgage Rates & Trends - March 8, 2023: Rates Inch Up

After sinking more than a quarter point over the previous two days, 30-year rates rose a few points Tuesday, with most other loan averages seeing an increase as well.

Today's National Mortgage Rate Averages

Rates on 30-year mortgages added back five basis points Tuesday, boosting the average to 7.09% and keeping rates in a lower range after hitting 7.30% last week. Still, current rates are almost a full percentage point more expensive than the five-month low of 6.11% registered just over a month ago. Compared to October, however, the current average is about a half percentage point cheaper than the 20-year peak of 7.58%.

The 15-year loan average also added five basis points Tuesday, climbing to 6.40%. Rates on 15-year loans are sitting near their highest level since early November, but are also almost two-thirds of a percentage point below October's 15-year high of 7.03%.

For a fifth consecutive day, the Jumbo 30-year average marked time at 6.15%. Jumbo 30-year rates are holding at their highest mark since early November, and compared to October's 12-year high of 6.27%, are a minor eighth of a point lower.

Refinancing rates moved similarly to new purchase rates Tuesday. The 30-year refi average rose five basis points and the 15-year refi average tacked on three points, while Jumbo 30-year refi rates again remained flat. The cost to refinance for 30 years is currently 33 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.