Today's Mortgage Rates & Trends - November 16, 2022: Rates dip further

Rates were moderately down across almost every mortgage type Tuesday. The 30-year average gave up more than a tenth of a percentage point and is now at its lowest point since mid September.

Today's National Mortgage Rate Averages

The 30-year average dropped further below 7% Tuesday, subtracting 11 basis points to rest at 6.74%. It's the lowest level for the flagship product since September 22, and is 84 basis points under the 20-year high of 7.58% notched in mid-October.

Tuesday's rates on 15-year loans inched just slightly down. Dipping four basis points to 6.19%, the 15-year average has also erased 84 basis point from its October peak. The 7.03% reading last month was its highest level since 2007.

The Jumbo 30-year average also declined Tuesday, dropping an eighth of a percentage point to move below 6% for the first time since early October. Its current average of 5.90% sits a little more than a third of a point below its recent 12-year high of 6.27%.

Downward movement was seen among refinancing rates as well Tuesday, though the 30-year refi average edged only two basis points lower. Rates on 15-year refi loans gave up a bolder 17 points while the Jumbo 30-year refi average lost 12 points. The current cost to refinance with a fixed-rate loan is up to 55 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 has dramatically outdone the summer peak, with late October's 30-year average reaching 1.2 percentage points above the June high.

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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.