Mortgage rates took yet another big jump Monday, with the 30-year average now up an eye-popping full percentage point in just two weeks. The steep ascent has pushed the flagship average firmly into 7% territory.
Today’s National Mortgage Rate Averages
For a third consecutive day Monday, 30-year mortgage rates bolted higher by two-tenths of a percentage point or more, resulting in an astonishing rise that has so far added 1.01% to the 30-year average since just September 12. Now at 7.16%, it’s estimated the average is in its most expensive range since 2002 (only weekly averages, not daily readings, are available that far back).
The 15-year average also continued its ascent, adding an eighth of a percentage point Monday to register at 6.56%. Like 30-year loans, 15-year rates have climbed more than a full percentage point over the last two weeks, and are at their highest mark since at least 2008.
Jumbo 30-year rates similarly tacked on another eighth of a percentage point Monday to notch a 5.90% average. Though not quite as historically elevated as the standard 30-year and 15-year averages, Jumbo 30-year rates are at their most expensive level since 2010.
Rates moved very similarly on the refinancing side Monday, with the 30-year refi average climbing 25 basis points, 15-year refi rates rising 15 points, and the Jumbo 30-year refi average gaining 13 points. The cost to refinance with a fixed-rate loan is currently zero to 39 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 peaking in mid-June almost 3.5 percentage points above its August 2021 low of 2.89%. But September’s spike has easily outdone the early summer peak, with the current 30-year average sitting 78 basis points higher than 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.