Mortgage Rates Inch Up, But Stay Under 7%

Rates on 30-year mortgages have been bobbing around in upper-6% territory since early June. Edging 2 basis points higher Tuesday, the 30-year average is now 6.89%. Rates for most other mortgage types also saw minimal movement to start the week.

Since 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

Rates on 30-year mortgages crept a couple basis points higher Tuesday, nudging the average to 6.89%. That's 12 basis points above the June low of 6.77%, which was the cheapest mark we'd seen since a March valley of 6.69%.

Rates on 30-year mortgages are still elevated compared to early February when the average plummeted to 6.36%. But today's rates are far below the historic 23-year high of 8.01% we saw in October.

New purchase 15-year rates also showed minor movement, tacking on a single basis point for a Tuesday average of 6.07%. Just over a week ago, a multi-day drop of 33 basis points had lowered the 15-year average to 5.87%. Though now slightly higher, current rates on 15-year loans are well under last fall's 7.08% peak—the highest reading since 2000.

Jumbo 30-year rates were also close to flat Tuesday, subtracting 1 basis point. Now at 6.97%, the jumbo 30-year average is marginally 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 another 8 basis points to 6.87%, for a third consecutive week of declines. In October, 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

Several refinancing mortgage rates moved more substantially Tuesday than their new purchase counterparts. The 30-year refi average fell 15 basis points, while the 15-year average dropped 14 points.

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 Tuesday were New York, Texas, Washington, Florida, Georgia, Michigan, Hawaii, Illinois, and New Jersey, while the states with the highest average rates were North Dakota, West Virginia, Iowa, Maryland, Mississippi, Oregon, South Carolina, and Washington, D.C.

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 seventh consecutive rate hold announced earlier this month. 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 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.