| National Averages of Lenders' Best Rates - Refinance |
|---|
| Loan Type | Refinance Rates | Daily Change |
|---|
| 30-Year Fixed | 7.46% | -0.27 |
| FHA 30-Year Fixed | 7.61% | -0.24 |
| VA 30-Year Fixed | 7.55% | +0.01 |
| Jumbo 30-Year Fixed | 6.70% | No Change |
| 20-Year Fixed | 7.23% | -0.16 |
| 15-Year Fixed | 6.75% | -0.03 |
| FHA 15-Year Fixed | 6.90% | -0.01 |
| Jumbo 15-Year Fixed | 6.66% | No Change |
| 10-Year Fixed | 6.68% | -0.02 |
| 10/6 ARM | 7.66% | -0.02 |
| 7/6 ARM | 7.69% | -0.05 |
| Jumbo 7/6 ARM | 6.55% | +0.12 |
| 5/6 ARM | 7.72% | No Change |
| Jumbo 5/6 ARM | 6.43% | 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 ratesmay 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 Vermont, Delaware, Hawaii, New York, North Carolina, and Rhode Island, while the states with the most expensive rates were Minnesota, Nevada, Alabama, Oregon, and Idaho.
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.
FAQs
Mortgage Rate Predictions
It's safe to say there is no broad consensus. Here's what the experts say: As of its last public forecast data made available in August 2023, the National Association of REALTORS® felt rates would end the year around 6.5%, before falling to about 6% in 2024.
How much do mortgage rates drop during a recession? ›
The chart above tracks mortgage rates against recessionary periods from 1972 through last year; during our last recessionary period, rates dropped from 3.75 percent to 2.75 percent; before that, they dropped 6 percent to 4.8 percent.
What is the lowest average 30-year fixed mortgage rate ever recorded? ›
The average 30-year fixed rate reached an all-time record low of 2.65% in January 2021 before surging to 7.79% in October 2023, according to Freddie Mac.
Have mortgage rates dropped after 4 weeks of increases? ›
(RTTNews) - Mortgage rates, or interest rates on home loans, dropped after it increased for four consecutive weeks, according to mortgage provider Freddie Mac (FMCC. OB). The 30-year FRM averaged 6.88 percent as of March 7, 2024, down from last week when it averaged 6.94 percent.
What is the mortgage rate prediction for 2024? ›
That means the mortgage rates will likely be in the 6% to 7% range for most of the year.” Mortgage Bankers Association (MBA). MBA's baseline forecast is for the 30-year fixed-rate mortgage to end 2024 at 6.1% and reach 5.5% at the end of 2025 as Treasury rates decline and the spread narrows.
Will mortgage rates ever be 3 again? ›
After all, higher rates equate to higher minimum payments. So, you may be wondering if, and when, mortgage rates might fall to 3% or lower again - and whether or not it's worth waiting to buy a home until they do. Although rates could fall to 3% again one day, it's not likely to happen any time soon.
How low will mortgage rates go in 2025? ›
"By the first quarter of 2025, mortgage rates could potentially fall below the 6% threshold, or maybe even lower." Hold steady through 2024: Afifa Saburi, a capital markets analyst for Veterans United Home Loans, doesn't think rates are going to drop much this year.
Is it cheaper to buy a house during a recession? ›
This decreased demand means less competition for homes on the market, which in turn means sellers who are more open to lowering their prices. So buying during a recession, if you are financially able to, may get you a better deal.
What happens to my mortgage if the economy collapses? ›
What Happens To Your Mortgage Rates & Payments? If you have a fixed-rate mortgage, then your monthly payments will remain the same, which can be beneficial in a high-inflation environment. However, if you have an adjustable-rate mortgage, expect your payments to increase.
What is the highest 30 year mortgage rate in US history? ›
In the fall of 1981, the average 30-year mortgage rate reached an all-time high of 18.63%. We'll examine mortgage trends for the past five decades and look ahead to see what borrowers can expect in 2024.
What were the highest mortgage rates in history? The highest mortgage rates in history were in the 1980s. Thirty-year fixed mortgage rates hit their peak at 18.63% in October 1981.
What is the best 30 year mortgage rate ever? ›
2021: The lowest 30-year mortgage rates ever
And it kept falling to a new record low of just 2.65% in January 2021. The average mortgage rate for that year was 2.96%.
Why did my mortgage go up if I have a fixed-rate? ›
The part of your fixed-rate mortgage payment that changes annually is your escrow. Each year, the financial institution that holds your mortgage estimates how much you'll pay in property taxes and home insurance. If your home value has risen since the prior year, the cost of your taxes and insurance will also increase.
Will interest rate drop in 2024? ›
Interest rates have held steady since July 2023.
The Fed raised the rate 11 times between March 2022 and July 2023 to combat ongoing inflation. After its December 2023 meeting, the Federal Open Market Committee (FOMC) predicted making three quarter-point cuts by the end of 2024 to lower the federal funds rate to 4.6%.
What is prime rate today? ›
The current Bank of America, N.A. prime rate is 8.50% (rate effective as of July 27, 2023).
What is the interest rate forecast for the next 5 years? ›
Projected Interest Rates in the Next Five Years
ING's interest rate predictions indicate 2024 rates starting at 4%, with subsequent cuts to 3.75% in the second quarter. Then, 3.5% in the third, and 3.25% in the final quarter of 2024. In 2025, ING predicts a further decline to 3%.
What is the mortgage rate forecast for 2026? ›
The 10-year treasury constant maturity rate in the U.S. is forecast to decline by 0.8 percent by 2026, while the 30-year fixed mortgage rate is expected to fall by 1.6 percent. From seven percent in the third quarter of 2023, the average 30-year mortgage rate is projected to reach 5.4 percent in 2026.
