Today’s Mortgage Rates & Trends – August 10, 2022: Rates inch down
After four days of dramatic swings, 30-year mortgage rates dropped modestly Tuesday. Movement was mixed across other averages.
Today’s National Mortgage Rate Averages
The 30-year average moved six basis points lower Tuesday, after wildly seesawing the four previous days. The average had swung from 5.26% to 5.82% over that period, and now sits at 5.64%. That’s about three-quarters of a percentage point below the 14-year peak of 6.38% notched in mid-June.
In contrast, the 15-year average rose a tenth of a point Tuesday, reaching 5.00%. Like 30-year loans, 15-year rates registered their highest level since 2008 about eight weeks ago, when they reached 5.41%.
Jumbo 30-year rates, meanwhile, held steady for a second day at 4.94%. The Jumbo 30-year average has been sitting below the 5% threshold for the last two weeks.
After a major rate dip last summer, mortgage rates have since skyrocketed, with the 30-year average peaking in mid-June by an eye-popping 3.49 percentage points above its August 2021 low of 2.89%.
Meanwhile, mid-June saw the 15-year and Jumbo 30-year averages shoot 3.21 and 2.38 percentage points higher, respectively, than their summer 2021 valleys.
Refinancing rates moved similarly Tuesday, with the 30-year refi average dropping 12 basis points, the 15-year adding seven points, and Jumbo 30-year refi rates again remaining flat. The cost to refinance with a fixed-rate loan is currently nine to 49 points more expensive than a new purchase loan.
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. They 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 given the value of the home.
Calculate monthly payments for different loan scenarios with our Mortgage Calculator.
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 term, and size, in addition to individual lenders’ varying risk management strategies.
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, including 10-year Treasury yields; the Federal Reserve’s current monetary policy, especially as it relates to funding government-backed mortgages; and competition between 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 have kept the mortgage market relatively low for much of this year. In particular, the Federal Reserve has been buying billions of dollars of bonds in response to the pandemic’s economic pressures, and it continues to do so. This bond-buying policy (and not the more publicized federal funds rate) is a major influencer on mortgage rates.
On May 4, the Fed announced that it will begin reducing its balance sheet on June 1. Identical sizable reductions will occur in June, July, and August and then be doubled beginning in September. This will be on top of its existing move to reduce new bond purchases by an increment every month, the so-called taper, which began in November.
The Fed’s rate and policy committee, called the Federal Open Market Committee (FOMC), meets every six to eight weeks. Their next scheduled meeting takes place September 20–21.
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.