Today's Mortgage Rates & Trends - October 24, 2022: Rates hit another high

Three days of increases have turned a rate dip back into a peak, with the 30-year average exceeding its recent 20-year high to set a new higher mark Friday.

Today's National Mortgage Rate Averages

After dipping from the previous week's 20-year peak of 7.55% down to 7.22% on Tuesday, the flagship average has retaken all of that higher ground, plus more. Tacking on another four basis points Friday, the 30-year average ended the week at 7.58%, now its most expensive level since 2002.

Rates on 15-year loans meanwhile retreated slightly. Thursday's 15-year average of 7.03% was its highest reading in 15 years, but Friday saw the average decline four points to dip back below 7%.

Jumbo 30-year rates are also in elevated territory, but held steady Friday. The Jumbo 30-year average rested at 6.27%, a level not previously seen since June 2010.

Refinancing rates on 30-year loans climbed just two points Friday, but the refi average is now almost 8%. Like new purchase loans, Jumbo 30-year refi rates held essentially steady. The 15-year refi average, however, jumped more than a tenth of a point Friday. The current cost to refinance with a fixed-rate loan is up to 39 basis points higher than new purchase rates.

After a historical rate plunge in summer 2021, mortgage rates skyrocketed in the first half of this year, with the 30-year average hitting a mid-June peak of 6.38%, which was almost 3.5 percentage points above its August 2021 floor of 2.89%. But this fall's surge is dramatically outdoing the summer high, with the 30-year average now registering 1.2 percentage points above 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 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.