30-Year Mortgage Rates Dip

Rates for most mortgage types saw slight downturns Wednesday, but they remain only slightly below recent highs. The 30-year new purchase average shed a few basis points to land at 7.33%, just a bit under a five-month peak notched last week. Rates for most other mortgage types also edged lower, but movement was minor.

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 seek.

Today's Mortgage Rate Averages: New Purchase

After shooting up last week in response to newly released inflation data, rates on 30-year new purchase have fallen just slightly. Dropping 3 basis points Wednesday, the flagship average is currently 7.33%—not far below the 7.37% peak registered last week, which was the most expensive average since mid-November.

Thirty-year rates are significantly elevated vs. early February, when the average dipped as low as 6.36%. But rates are still considerably cheaper than when the 30-year average hit a historic 23-year peak of 8.01% in October.

New purchase 15-year mortgage also dipped Wednesday. Shedding 5 points, the 15-year average is 6.46%—just a bit below last week's five-month high of 6.57%. Still, today's 15-year rates are considerably more affordable than last fall's 7.08% average—a peak since 2000.

Jumbo 30-year rates instead inched up Wednesday. That takes them back up to the same 7.30% peak of two weeks ago, which is the average's highest level since November. Though daily historical jumbo rates are not available before 2009, it's estimated the 8.14% peak reached last fall was the most expensive jumbo 30-year average in 20-plus years.

Most other new purchase averages saw minor down ticks Wednesday. The biggest movement was a drop of 10 basis points in the FHA 15-year average.

The Weekly Freddie Mac Average

Every Thursday, Freddie Mac publishes a weekly average of 30-year mortgage rates. Today's reading rose 5 basis points to 7.22%, marking its highest level since late November. Back in October, however, Freddie Mac's average reached a historic 23-year peak of 7.79%. It later dropped significantly, registering a low point of 6.60% in mid-January.

Freddie Mac’s average differs from what we report for 30-year rates because Freddie Mac calculates a weekly average that blends five previous days of rates. In contrast, our Investopedia 30-year average is a daily reading, offering a more precise and timely indicator of rate movement. In addition, the criteria for included loans (e.g., amount of down payment, credit score, inclusion of discount points) varies between Freddie Mac's methodology and our own.

Today's Mortgage Rate Averages: Refinancing

Many refinancing averages dropped by larger margins than their new purchase counterparts Wednesday, though the 30-year refi average dipped by a similar 4 basis points. That leaves the gap between 30-year new purchase and refi rates at 36 basis points. The 15-year refi average meanwhile fell 7 points. Jumbo 30-year refi rates, however, moved the other way, adding 10 basis points on average.

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

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 Wednesday were Alaska, New York, Louisiana, New Jersey, North Carolina, Idaho, and Kentucky, while the states with the highest average rates were West Virginia, Washington, D.C., Iowa, Kansas, Maryland, Nebraska, Virginia, 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 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 been maintaining the federal funds rate at its current level since July, with a sixth consecutive rate hold announced May 1. Although inflation has come down considerably, it is still above the Fed's target level of 2%. Until the central bank feels confident inflation is falling sufficiently and sustainably, it has said it's hesitant to start cutting rates.

The Fed will hold five more meetings this year, with the next one scheduled to conclude June 12.

How We Track Mortgage Rates

The national averages cited above were calculated based on rates offered through Zillow Group Marketplace by approximately 40 lenders, assuming a loan-to-value ratio (LTV) of 80% (i.e., a down payment of at least 20%) and an applicant with a credit score in the 680-739 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 state rates, the averages listed for each state assumes the same parameters of a maximum 80% LTV and a credit score between 680 and 739.