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Mortgage Rates Plunge, Dropping 30-Year Average to Lowest Level in 2 Months

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Mortgage rates have continued their wild swings this week, with a third consecutive day of moving by double-digit basis points. The 30-year average fell a third of a percentage point Thursday, to 7.64%. That’s the lowest it’s been since mid-September. The 15-year average also plummeted, sinking to its lowest level since August.

Since rates vary widely across lenders, it’s always smart to shop around for your best mortgage option and compare rates regularly, no matter what type of loan you’re seeking.

National Averages of Lenders’ Best Rates
Loan Type
New Purchase
Refinance
30-Year Fixed
7.64%
8.12%
FHA 30-Year Fixed
7.39%
7.75%
Jumbo 30-Year Fixed
6.94%
6.94%
15-Year Fixed
6.94%
7.26%
5/6 ARM
7.85%
7.85%
National averages of the lowest rates offered by more than 200 of the country’s top lenders, with a loan-to-value ratio (LTV) of 80%, an applicant with a FICO credit score of 700–760, and no mortgage points.

Today’s Mortgage Rate Averages: New Purchase

The dramatic yo-yo continues for 30-year rates this week. Thursday saw the flagship average plunge 33 basis points, dropping to 7.64%. That’s the lowest average since Sept. 14, and it’s now far below Oct. 17’s reading of 8.45%, a 23-year peak.

Note

The Freddie Mac mortgage average released on Oct. 26 revealed that 30-year rates had climbed for a seventh straight week to average 7.79%—their highest level since 2000. The Freddie Mac average has since slid to 7.44%, the lowest average since late September.

Freddie Mac’s averages differ from those we publish here due to Freddie Mac calculating a weekly average that blends five previous days of rates, which may include loans priced with discount points. In contrast, Investopedia’s averages indicate daily rate movement and only include zero-point loans.

Thursday’s rates on 15-year loans dropped just over a quarter percentage point, but it was enough to lower the 15-year average to its lowest point since Aug. 10. Now at 6.94%, the 15-year average still sits well below the record peak of 7.59% recorded on Oct. 23, which was the highest 15-year average since 2000.

Jumbo 30-year rates moved a more moderate 12 basis points Thursday, dipping to 6.94%. Though daily jumbo rates were not available before 2009, it’s estimated that the 7.52% peak on Oct. 19 was the most expensive average for jumbo 30-year loans in more than 20 years.

Aside from a few adjustable-rate averages that remained essentially flat, other loan averages also dropped significantly Thursday.

National Averages of Lenders’ Best Rates – New Purchase
Loan Type
New Purchase Rates
Daily Change
30-Year Fixed
7.64%
-0.33
FHA 30-Year Fixed
7.39%
-0.24
VA 30-Year Fixed
7.18%
-0.37
Jumbo 30-Year Fixed
6.94%
-0.12
20-Year Fixed
7.41%
-0.23
15-Year Fixed
6.94%
-0.27
FHA 15-Year Fixed
7.26%
-0.11
Jumbo 15-Year Fixed
7.02%
-0.13
10-Year Fixed
6.90%
-0.25
10/6 ARM
8.08%
-0.03
7/6 ARM
7.94%
+0.02
Jumbo 7/6 ARM
6.71%
-0.12
5/6 ARM
7.85%
-0.02
Jumbo 5/6 ARM
6.81%
No Change

Today’s Mortgage Rate Averages: Refinancing

Almost every refinancing rate average also saw substantial downward movement Thursday. The 30-year refi average sank 26 basis points, spreading the gap between 30-year new purchase and refi rates to 48 basis points. The 15-year refi average, meanwhile, slid 16 basis points, and the jumbo 30-year refi average, 13 points.

Only the 5/6 ARM and jumbo 5/6 ARM averages held their ground Thursday, remaining flat.

National Averages of Lenders’ Best Rates – Refinance
Loan Type
Refinance Rates
Daily Change
30-Year Fixed
8.12%
-0.26
FHA 30-Year Fixed
7.75%
-0.26
VA 30-Year Fixed
7.92%
-0.21
Jumbo 30-Year Fixed
6.94%
-0.13
20-Year Fixed
7.94%
-0.26
15-Year Fixed
7.26%
-0.16
FHA 15-Year Fixed
7.33%
-0.07
Jumbo 15-Year Fixed
7.02%
-0.13
10-Year Fixed
7.20%
-0.19
10/6 ARM
8.16%
-0.08
7/6 ARM
8.03%
-0.06
Jumbo 7/6 ARM
6.81%
-0.13
5/6 ARM
7.85%
No Change
Jumbo 5/6 ARM
6.81%
No Change

Calculate monthly payments for different loan scenarios with our Mortgage Calculator.

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, while these rates are averages. Teaser rates 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. The mortgage rate you ultimately secure will be based on factors like your credit score, income, and more, so it may be higher or lower than the averages you see here.

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 type, and size, in addition to individual lenders’ varying risk management strategies.

The states with the lowest 30-year new purchase averages were Vermont, Delaware, North Carolina, Tennessee, and Alaska, while the states with the highest averages were Oregon, Nevada, Arizona, Minnesota, and Washington.

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, especially 10-year Treasury yields
The Federal Reserve’s current monetary policy, especially as it relates to bond buying and funding government-backed mortgages
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 is a major influencer of mortgage rates.

But starting in Nov. 2021, the Fed began tapering its bond purchases downward, making sizable reductions each month until reaching net zero in March 2022.

Since that time, the Fed has been aggressively raising the federal funds rate to fight decades-high inflation. While the fed funds rate can influence mortgage rates, it does not directly do so. In fact, the fed funds rate and mortgage rates can move in opposite directions.

However, given the historic speed and magnitude of the Fed’s 2022 and 2023 rate increases—raising the benchmark rate 5.25 percentage points over the last 18 months—even the indirect influence of the fed funds rate has resulted in an upward impact on mortgage rates over the last two years.

The Fed has opted to hold rates steady at its last two meetings, which concluded Sept. 20 and Nov. 1. But Fed Chair Jerome Powell has made it clear that another rate increase is still possible at a future meeting. The Fed’s next rate announcement will be made Dec. 13.

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.

Investopedia / Alice Morgan

Article Sources
Investopedia requires writers to use primary sources to support their work. These include white papers, government data, original reporting, and interviews with industry experts. We also reference original research from other reputable publishers where appropriate. You can learn more about the standards we follow in producing accurate, unbiased content in our
editorial policy.

Freddie Mac. “Mortgage Rates.”

Congressional Research Service. “Federal Reserve: Tapering of Asset Purchases,” Page 1.

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