Today's Mortgage Rates & Trends - May 17, 2023: Rates Edge Higher

Most mortgage averages were up once again Tuesday, though the gains were modest. Climbing for a third day, the 30-year average almost returned to 7% territory, while all of the jumbo rate averages held steady.

Today's National Mortgage Rate Averages

Rates on 30-year mortgages bumped three basis points higher Tuesday to 6.99%, marking a three-day climb of 16 points and taking the flagship average almost back to the 7% mark. The last time it breached the notable threshold was for one day in mid-April. Rates hit a 20-year high of 7.58% last October, and since that time have seen a five-month low of 6.11% in February.

The 15-year rate average climbed a bit more substantially Tuesday. Adding eight basis points to hit 6.25%, rates on 15-year loans are at their highest level since April 19. Like 30-year rates, the 15-year average continues to move in a space between a February valley of 5.23% and an October peak of 7.03%.

Rates on all jumbo loan types marked time Tuesday. Holding at 6.27%, the current jumbo 30-year average matches its highest point in nearly 13 years, though it has revisited that level multiple times this month.

Tuesday's refinancing rates moved very similarly to new purchase rates. The 30-year refi average edged four basis points higher, 15-year refi rates climbed eight points, and all jumbo refi averages were flat. The gap between 30-year new purchase and refi rates was 41 basis points Tuesday.

After a historical rate plunge in August 2021, mortgage rates skyrocketed in the first half of 2022. Indeed, the 30-year average's 2022 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 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.