Today’s Mortgage Rates & Trends – September 15, 2022: Rates hold

Mortgage rates largely wavered Wednesday, after many averages bolted to new highs the day before. The 30-year average is now in the mid 6% range and at its highest level since the fall of 2008.

Today’s National Mortgage Rate Averages

The 30-year mortgage average held close Wednesday to the elevated range it hit Tuesday, when the latest inflation news sent mortgage rates to new highs. Shaving off just two basis points, the flagship average is now at 6.41%. Before this week, a 6.38% peak in mid-June peak was the highest average since 2008.

The 15-year average meanwhile held completely flat Wednesday, remaining at 5.79%. This too is a 14-year high, having surpassed the 5.62% reading from mid-June’s surge.

Jumbo 30-year rates also held steady Wednesday. Marking time at 5.52%, the Jumbo 30-year average is just a point under June’s 5.53% peak.

Refinancing rates moved slightly differently Wednesday, with the 30-year refi average sinking a more dramatic 15 basis points. The 15-year refi average shed just four points, while the Jumbo 30-year refi average was flat. The cost to refinance with a fixed-rate loan is currently zero to 35 points more expensive than new purchase loans.

After a major rate dip last summer, mortgage rates skyrocketed in the first half of 2022, with the 30-year average peaking in mid-June by almost 3.5 percentage points above its August 2021 low of 2.89%. The current 30-year average is three basis points above June’s high.

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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.

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.