After finally hitting the brakes Wednesday on its dramatic September surge, the 30-year average was back up Thursday. Though 30-year rates rose by only a minor increment, it was enough to take the flagship average back above 7%.
Today’s National Mortgage Rate Averages
In what’s been a wild September for mortgage rates, Thursday’s rate movement was comparatively unremarkable. The 30-year average climbed five basis points, taking it back above the 7% threshold. But that came after a major plunge Wednesday knocked 30-year rates down from what was estimated to be a 20-year high. (Because only weekly readings, not daily averages, are available before 2008, it’s difficult to nail down a precise historical perspective. But it’s estimated that Tuesday’s reading was the highest average since 2002.)
From September 11 to September 27, rates on 30-year mortgages surged an eye-popping 1.27 percentage points, raising the average to 7.42% over a short 16-day period. With Wednesday’s drop and Thursday’s minor uptick, the average now stands at 7.04%.
Rates on 15-year loans also rose Thursday, by a more substantial margin. Tacking on nine basis points, the 15-year average is now 6.59%. Like 30-year loans, 15-year rates had climbed more than a full percentage point in mid-September to notch their highest peak since at least 2008.
Jumbo 30-year meanwhile marked time Thursday, holding at 5.90%. Though not quite as historically elevated as the standard 30-year and 15-year averages, Jumbo 30-year rates had reached their most expensive point since 2010 on Tuesday, averaging 6.02%.
Refi rates moved similarly Thursday to new purchase rates. The 30-year refi average gained five basis points, 15-year rates edged up a more modest two points, and the Jumbo 30-year refi average was flat. The cost to refinance with a fixed-rate loan is currently zero to 46 points more expensive than new purchase loans.
After a major rate dip last summer, mortgage rates skyrocketed in the first half of 2022, with the 30-year average notching a mid-June peak almost 3.5 percentage points higher than its August 2021 low of 2.89%. But the September surge easily outdid the summer peak, with the 30-year average ultimately climbing 104 basis points above June’s high-water mark.
The rates you see here generally won’t compare directly with teaser rates you see advertised online, since those rates are cherry-picked as the most attractive. They may involve paying points in advance, or they may be selected based on a hypothetical borrower with an ultra-high credit score or taking a smaller-than-typical loan given the value of the home.
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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.