Today's Mortgage Rates & Trends - May 2, 2023: Rates Mostly Steady

Movement was minor across most mortgage averages Monday. The 30-year average edged minimally up to remain in a range below 7%, while the 5/6 ARM average and all of the jumbo averages marched in place at their Friday levels.

Today's National Mortgage Rate Averages

Rates on 30-year mortgages were relatively flat Monday, with the flagship average tacking on a single basis point. Currently averaging 6.90%, 30-year rates have been moving within upper 6% territory for most of the last six weeks. Last October, 30-year rates hit a 20-year high of 7.58%, but in February sank to a five-month low of 6.11%. They've since remained within that range.

The 15-year rate average Monday added back the 5 basis points it subtracted Tuesday, returning to 6.19%. Rates on 15-year loans also remain bounded by a February low point and an October peak, with those bookends being 5.23% and 7.03%, respectively. The October reading was the average's highest mark in 15 years.

All jumbo rate averages remained unchanged for a second day Monday. Holding at 6.02%, the jumbo 30-year average is just 25 basis points under an October peak of 6.27%, which was a 12-year high.

Monday's refinancing averages moved in close alignment with new purchase rates, with the 30-year refi average adding a single basis point, the 15-year refi average gaining 4 points, and jumbo 30-year refi rates again remaining flat. The cost to refinance for 30 years is currently 37 basis points more expensive than 30-year 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 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. 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.