Today's Mortgage Rates & Trends - May 15, 2023: Rates Waver

Mortgage rates moved generally up Friday, though most averages saw only a minor increase. An exception was the jumbo 30-year average, which climbed a full eighth of a percentage point, while the other jumbo rate averages were flat.

Today's National Mortgage Rate Averages

The 30-year mortgage average inched just slightly higher Friday, tacking on a minor three basis points to register at 6.85%. The flagship average has been bobbing in the high 6% range for about a month, though it broke through the 7% threshold for one day in mid-April. The current average remains approximately midway between a February five-month valley of 6.11% and an October 20-year peak of 7.58%.

Rates on 15-year loans rose a bit more substantially Friday, after hitting a four-week low on Thursday. Rising seven basis points, the 15-year average is now 5.96%, and like 30-year rates, the average has occupied a range that's bounded by a February five-month low, of 5.23%, and October's 15-year high of 7.03%.

Jumbo 30-year rates jumped 13 basis points Friday, raising the average to 6.15%. Last week, the average matched a 12-year high of 6.27% for two days. Averages for jumbo 15-year, 7/6 ARM, and 5/6 ARM loans, meanwhile, held steady.

Friday's refinancing rates moved a bit more boldly than new purchase rates. The 30-year refi average added 10 basis points, the 15-year refi average climbed 12 basis points, and like its new purchase counterpart, the jumbo 30-year refi average rose an eighth of a point. The gap between 30-year new purchase and refi rates further narrowed to 36 basis points Thursday.

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 last 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 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. The next scheduled meeting will conclude on June 14.

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.