Mortgage Rates Follow Their Big Drop with a Big Jump—But Stay Below 8% - Investopedia

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Mortgage rates are moving wildly this week. First, the 30-year mortgage average dropped almost a third of a point Tuesday, sinking to its lowest point in about 8 weeks. But on Wednesday it reversed course to claw back much of that decline. The flagship average is still sitting below the 8% mark, however, registering at 7.97%. Rates for other loan types were meanwhile mixed—most gained ground, but a few were flat and a couple dipped lower.

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

National Averages of Lenders' Best Rates
Loan Type	New Purchase	Refinance
30-Year Fixed	7.97%	8.38%
FHA 30-Year Fixed	7.63%	8.01%
Jumbo 30-Year Fixed	7.06%	7.07%
15-Year Fixed	7.21%	7.42%
5/6 ARM	7.87%	7.85%

National averages of the lowest rates offered by more than 200 of the country's top lenders, with a loan-to-value ratio (LTV) of 80%, an applicant with a FICO credit score of 700–760, and no mortgage points.

Today's Mortgage Rate Averages: New Purchase

After declining a dramatic 30 basis points Tuesday, the 30-year mortgage average climbed back 20 basis points yesterday. That raises the average to 7.97%, just shy of the notable 8% threshold. The average two days ago was an 8-week low, after registering a 23-year high of 8.45% on Oct. 17.

Compare the Best Mortgage Rates Today (November 2023)

Note

The Freddie Mac mortgage average released on Oct. 26 revealed that 30-year rates had climbed for a seventh straight week to average 7.79%—their highest level since 2000. The Freddie Mac average has since slid to 7.44%, the lowest average since late September.

Freddie Mac’s averages differ from those we publish here due to Freddie Mac calculating a weekly average that blends five previous days of rates, and which may include loans priced with discount points. In contrast, Investopedia’s averages indicate daily rate movement and only include zero-point loans.

Wednesday's rates on 15-year loans similarly jumped higher, gaining 22 basis points to cross back into 7% territory. Now at 7.21%, the 15-year average still sits well below the record peak of 7.59% recorded Oct. 23, which was the highest 15-year average since 2000.

Jumbo 30-year rates were flat Wednesday, holding at 7.06%. Though daily jumbo rates were not available before 2009, it's estimated that the 7.52% peak on Oct. 19 was the most expensive average for jumbo 30-year loans in more than 20 years.

The only average to move substantially downward Wednesday was for jumbo 5/6 adjustable-rate loans, whose rates dropped 13 basis points on average.

National Averages of Lenders' Best Rates - New Purchase
Loan Type	New Purchase Rates	Daily Change
30-Year Fixed	7.97%	+0.20
FHA 30-Year Fixed	7.63%	+0.14
VA 30-Year Fixed	7.55%	+0.20
Jumbo 30-Year Fixed	7.06%	No Change
20-Year Fixed	7.64%	+0.16
15-Year Fixed	7.21%	+0.22
FHA 15-Year Fixed	7.37%	+0.02
Jumbo 15-Year Fixed	7.15%	No Change
10-Year Fixed	7.15%	+0.24
10/6 ARM	8.11%	+0.10
7/6 ARM	7.92%	+0.05
Jumbo 7/6 ARM	6.83%	No Change
5/6 ARM	7.87%	-0.01
Jumbo 5/6 ARM	6.81%	-0.13

Today's Mortgage Rate Averages: Refinancing

Refinancing rates moved fairly similarly to new purchase rates Wednesday, with the 30-year refi average spiking 22 basis points. The gap between 30-year new purchase and refi rates is currently 41 basis points. The 10-year and 20-year refi averages meanwhile jumped 19 basis points each, and the 15-year refi average gained 15 points. Rates on jumbo 30-year refi loans marked time.

Both the 5/6 ARM and jumbo 5/6 ARM averages moved the other way Wednesday, dropping 11 and 13 basis points, respectively.

National Averages of Lenders' Best Rates - Refinance
Loan Type	Refinance Rates	Daily Change
30-Year Fixed	8.38%	+0.22
FHA 30-Year Fixed	8.01%	+0.18
VA 30-Year Fixed	8.13%	+0.07
Jumbo 30-Year Fixed	7.07%	No Change
20-Year Fixed	8.20%	+0.19
15-Year Fixed	7.42%	+0.15
FHA 15-Year Fixed	7.40%	+0.02
Jumbo 15-Year Fixed	7.15%	No Change
10-Year Fixed	7.39%	+0.19
10/6 ARM	8.24%	-0.01
7/6 ARM	8.09%	No Change
Jumbo 7/6 ARM	6.94%	No Change
5/6 ARM	7.85%	-0.11
Jumbo 5/6 ARM	6.81%	-0.13

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 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 lowest 30-year new purchase averages were Mississippi, Louisiana, Iowa, New York, North Dakota, and Wyoming, while the states with the highest averages were Maryland, Washington, D.C., Virginia, Pennsylvania, Delaware, and New Jersey.

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.

Since that time, the Fed has been aggressively raising 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.

However, given the historic speed and magnitude of the Fed's 2022 and 2023 rate increases—raising the benchmark rate 5.25 percentage points over the last 18 months—even the indirect influence of the fed funds rate has resulted in an upward impact on mortgage rates over the last two years.

The Fed has opted to hold rates steady at its last two meetings, which concluded Sept. 20 and Nov. 1. But Fed Chair Jerome Powell has made it clear that another rate increase is still possible at a future meeting. The Fed’s next rate announcement will be made Dec. 13.

Methodology

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.

Investopedia / Alice Morgan

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