Today's Mortgage Rates & Trends - November 1, 2022: Rates inch back up

After a four-day decline dropped the 30-year average well below its recent 20-year peak, rates are edging back up, with the flagship average climbing an eighth of a point across two days.

Today's National Mortgage Rate Averages

Thirty-year mortgage rates extended their reversal Monday, with a second day of increases. Rising nine basis points, the 30-year average is now 7.27%. Two Fridays ago, the average climbed to 7.58%, its most expensive level in more than 20 years. But then across four days last week, the average shed four-tenths of a point to dip to 7.18%.

Rates on 15-year mortgages rose similarly, gaining 11 basis points to reach 6.73%. Like 30-year rates, the 15-year average is roughly three-tenths of a point below its recent peak, which at 7.03% was its highest level since 2007.

Jumbo 30-year rates tacked on 13 basis points Monday. Now at 6.15%, the Jumbo 30-year average is within an eighth of a point of its 12-year peak of 6.27%.

Monday's refinancing rates moved similarly for 30-year and Jumbo 30-year loans, with each of those refi averages climbing 12 basis points, while the 15-year refi average moved up only two basis points. The current cost to refinance with a fixed-rate loan is up to 37 basis points more expensive than new purchase rates.

After a historical rate plunge in August 2021, mortgage rates skyrocketed in the first half of this year. 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 this fall is dramatically outdoing the summer peak, with the 30-year average having reached 1.2 percentage points above June's high.

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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 have kept the mortgage market relatively low for much of this year. In particular, the Federal Reserve has been buying billions of dollars of bonds in response to the pandemic's economic pressures, and it continues to do so. This bond-buying policy (and not the more publicized federal funds rate) is a major influencer on mortgage rates.

Since June, the Fed has been reducing its balance sheet. Identical sizable reductions occurred monthly through the summer and are being accelerated in September. This is on top of its plan to reduce new bond purchases by an increment every month, the so-called taper, which began in November.

The Fed's rate and policy committee, called the Federal Open Market Committee (FOMC), meets every six to eight weeks. Their next scheduled meeting takes place November 1-2.

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.