Today's Mortgage Rates & Trends - May 8, 2023: Rates Rise

Almost every mortgage average was notably up Friday, including a significant climb in jumbo 30-year rates that raised the average to its highest level since early March.

Today's National Mortgage Rate Averages

Rates on 30-year mortgages added five basis points Friday, bumping the flagship average up to 6.88% APY. Rates on 30-year loans continue to waver in a range between a February five-month low of 6.11% and an October 20-year high of 7.58%.

Rates on 15-year loans moved up as well, rising eight basis points to take the average back above 6%. Now at 6.07%, the 15-year average has been bounded since February between a five-month low of 5.23% that month and an October 15-year peak of 7.03%.

After holding steady for five days, the jumbo 30-year average finally showed movement. Climbing 13 basis points, the average is up to 6.15%, its highest reading in almost two months. The rise also takes the average within just an eighth of a percentage point of its October peak of 6.27%, which was a 12-year high.

Refinancing averages were up 13 basis points Friday for both 30-year standard and 30-year jumbo loans, while the 15-year refi average added just five basis points. The cost to refinance for 30 years is currently 36 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. 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.