30-Year Mortgage Rates Ease Lower.

Today’s Mortgage Rates & Trends - Feb. 21, 2024

After notching a new two-month high to start the week, 30-year mortgage rates eased a bit lower Tuesday. The average is now down to 7.39%, though that’s still well above the 6.94% reading on Feb. 1. Tuesday rates for almost all other new purchase loan types were flat or declined.

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

Today’s Mortgage Rate Averages: New Purchase

After surging more than half a percentage point above the 6.94% average seen at the start of February, 30-year new purchase rates gave up 8 basis points Tuesday. That lowers the flagship average to 7.39%. Though still elevated, 30-year rates sit far below the historic 23-year peak of 8.45% they reached in October.

Compare the Best Mortgage Rates Today - March 21, 2024

Rates on 15-year new purchase loans, meanwhile, held close to steady Tuesday, dipping just 2 basis points to 6.72%. That’s near a 9-week high—as well as being almost two-thirds of a percentage point above the seven-month low of 6.10% we saw just before the new year. But back in October, 15-year rates soared to a 7.59% peak—the most expensive level since 2000.

Jumbo 30-year rates remained flat for a fourth day at 6.82%. That’s the jumbo 30-year average’s highest mark since late November. Though daily historical jumbo rates are not available before 2009, it’s estimated the 7.52% peak reached in October was the most expensive jumbo 30-year average in more than 20 years.

Many other new purchase averages also marked time Tuesday, though several loan types saw notable declines. The FHA 30-year average fell 18 basis points, while the jumbo 5/6 adjustable-rate average subtracted 12 points. The only average to rise Tuesday was for VA 30-year loans, which saw a minor increase of 4 basis points on average.

The Weekly Freddie Mac Average

Every Thursday afternoon, Freddie Mac publishes a weekly average of 30-year mortgage rates, and last week’s reading inched up to 6.77%. Back in late October, Freddie Mac’s average reached a historic peak of 7.79%—its most expensive level in 23 years. But in the three months since, the Freddie Mac 30-year average has come down about a percentage point.

Freddie Mac’s average differs from our own 30-year average for two notable reasons. First, Freddie Mac calculates a weekly average that blends five previous days of rates, while our ProPedia averages are daily, offering a more precise and timely indicator of rate movement. Second, the rates included in Freddie Mac's survey can include loans priced with discount points, while ProPedia’s averages only include zero-point loans.

Today’s Mortgage Rate Averages: Refinancing

Refinancing rates on 30-year loans fell more dramatically Tuesday. The 30-year refi average dropped 14 basis points, narrowing the spread between 30-year new purchase and refi rates to 50 basis points.

The 15-year refi average meanwhile subtracted the same 2 basis points that its new purchase sibling did, while the jumbo 30-year refi average marched in place for a fourth day.

Tuesday refi averages for other loan types were mixed. The FHA 30-year refi average plunged 30 basis points, while the jumbo 5/6 ARM refi average gave up 12 points. The biggest refi gain Tuesday was in the 7/6 ARM average, which rose 10 basis points.

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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 cheapest 30-year new purchase rates were Mississippi, Vermont, Hawaii, Iowa, Louisiana, and Rhode Island, while the states with the most expensive rates were Alabama, Tennessee, Minnesota, Arizona, Georgia, and Nevada.

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

Between that time and July 2023, the Fed aggressively raised 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.

But given the historic speed and magnitude of the Fed’s 2022 and 2023 rate increases—raising the benchmark rate 5.25 percentage points over 16 months—even the indirect influence of the fed funds rate has resulted in a dramatic upward impact on mortgage rates over the last two years.

The Fed has opted to hold rates steady at its last four meetings, the last of which concluded Jan. 31. Though the central bank's statement signaled that we have almost certainly reached the end of Fed rate hikes in this campaign, Fed Chair Jerome Powell stated that inflation is still too high, and they will therefore proceed cautiously on deciding when to make the first rate cut. Specifically, he indicated it's unlikely they will be ready for any rate reduction by the time of their next meeting, which is scheduled for March 19–20.

After its December meeting, the Fed released quarterly data that showed almost 80% of Fed members expect there to be two to four rate cuts in 2024, with the median expectation being three rate decreases totaling 0.75%. But when in 2024 these will begin—and ultimately how many are implemented this year—is an open question at this time.

How We Track Mortgage Rates

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.