Mortgage rates reversed course Monday, dipping slightly after two days of increases. The minor decline is in keeping with the bouncing pattern we’ve seen since mid-August, which has kept the flagship 30-year rate within a narrow eighth of a point range above 3%.
Today’s National Mortgage Rate Averages
After notching increases for two days, mortgage rates moved back down Monday, with the 30-year fixed-rate average shedding three basis points to 3.06%. The 30-year rate has bobbed around between 3.00% and 3.13% for more than a month, and currently sits 17 points above the five-month low of 2.89% set on August 3.
Averages on 15-year fixed mortgages dropped similarly, losing four points to end Monday at 2.31%, while Jumbo 30-year rates dropped just a point to 3.16.%. Both of these averages are just 10 points above last month’s five-month low.
Refinance rates were also down, with fixed-rate refinancing priced 10 to 17 basis points higher than new purchase rates. Notably, Jumbo 30-year refinance rates are currently just three basis points above their lowest levels since February.
Important:
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 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.
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, as well as individual lenders’ varying risk management strategies.
These rates are surveyed directly from over 200 top lenders.
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 the last several months. In particular, the Federal Reserve has been buying billions of dollars of bonds and continues to do so. This bond-buying policy (and not the more publicized federal funds rate) is a major influencer on mortgage rates.
But Fed policy could soon change. The Fed’s rate and policy committee, called the Federal Open Market Committee (FOMC), meets every 6-8 weeks, and concluded their latest meeting July 28. The detailed minutes of that meeting were released August 18, and though they have not yet announced a change to their bond-buying plans, a majority of Fed members indicated they favor beginning to taper the stimulus by the end of 2021.
The next meeting of the FOMC will conclude September 22.
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.