Today's Mortgage Rates & Trends - April 28, 2023: Rates Jump

Mortgage interest rates jumped significantly on Thursday across virtually all terms, increasing by double digits and erasing much of the rate decreases experienced earlier in the week. After rising slightly on Wednesday, the 30-year fixed mortgage rate is back near the 7% mark with an 11 basis point increase yesterday.

Today's National Mortgage Rate Averages

The 30-year average mortgage rate moved significantly higher on Thursday, vaulting upward by 11 basis points to 6.95%, further erasing more of the 21 basis point slide in rates seen earlier in the late last week and earlier this week. The flagship 30-year rate is now flirting with the 7% threshold that was briefly crossed earlier in the month. The average continues to be bounded by February's five-month low of 6.11% and an October 20-year high of 7.58%.

Rates on 15-year loans sharply reversed course on Thursday, rising by 16 basis points to 6.19% on the heels of a five-day decline that had reduced the average to 6.03%. Rates on 15-year mortgages continue moving about in a range between a five-month low of 5.23% registered in February and a 15-year peak of 7.03% reached in October.

After sinking an eighth of a percentage point on Wednesday, the jumbo 30-year average pivoted with an equal increase on Thursday. Now at 6.02%, Thursday's jumbo 30-year average is 25 basis points below its October 12-year-high of 6.27%.

Refinancing rates jumped even more dramatically on Thursday when the 30-year refi average surged 26 basis points, while the 15-year refi average rose less dramatically by 12 points. Like its new purchase counterpart, the jumbo 30-year refi average swung back up by an eighth of a percentage point after retreating by the same increment the day before. The cost to refinance for 30 years is currently almost half a percent 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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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.