Mortgage Rates Holding at 3-Month Low

Rates on 30-year new purchase mortgages held steady Monday at 6.70%, their lowest average since early spring. This is a notable improvement after rates started July above 7%. Rate movement for other mortgage types was mixed on Monday.

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

The 30-year mortgage rate average held firm Monday at 6.70%. That's 38 basis points lower than the 7.08% mark registered on July 1 and is the cheapest average seen since March 29.

Though rates on 30-year mortgages are still slightly elevated compared to February, when the average plummeted to 6.36%, they are far below the historic 23-year high of 8.01% we saw in October.

Rates on 15-year mortgages meanwhile dipped 2 basis points Monday. That pushes the average down to 5.85%, which is similarly a low point since late March. Current rates on 15-year loans are well under last fall's 7.08% peak—the highest reading since 2000.

Jumbo 30-year rates instead ticked up 5 basis points Monday, rising to 7.01% after falling to a four-week low of 6.96% last week. The jumbo 30-year average is still well below the May high of 7.30%. Though daily historical jumbo rates were not published before 2009, it's estimated the 8.14% peak reached last fall was the most expensive jumbo 30-year average in 20-plus years.

The Weekly Freddie Mac Average

Every Thursday, Freddie Mac publishes a weekly average of 30-year mortgage rates. Last week's reading dropped 6 basis point to 6.89%—a fifth weekly decline over the last six weeks. Freddie Mac's average reached a historic 23-year peak of 7.79% in October. 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

Refinancing rates were also mixed Monday. The 30-year refi average dropped a notable 23 basis points, while the 15-year and jumbo 30-year refi averages saw increases.

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 Monday were New York, Texas, Florida, California, Utah, Hawaii, and Louisiana, while the states with the highest average rates were Alaska, West Virginia, Iowa, Washington, D.C., South Carolina, Vermont, 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 doesn't 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 last July, with a seventh consecutive rate hold announced last month. Although inflation has come down considerably, it's 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 four more meetings this year, with the next one scheduled to conclude July 31.

How We Track Mortgage Rates

The national and state averages cited above are provided as is via the Zillow Mortgage API, assuming a loan-to-value (LTV) ratio of 80% (i.e., a down payment of at least 20%) and an applicant 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. © Zillow, Inc., 2024. Use is subject to the Zillow Terms of Use.