Editor's Note: Investopedia will not publish daily mortgage rate news on Jan. 15 in observance of Martin Luther King, Jr. Day. We will return to our daily rate coverage on Tuesday, Jan. 16.

Rate movement was mixed across different loan types, with the 30-year mortgage rate average dropping 7 basis points Thursday to register 7.11%. It's the first decline of more than a couple of points since late December, and lowers the flagship average to its cheapest level in almost two weeks. In contrast, 15-year rates rose, climbing to their highest mark in almost a month.

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

National Averages of Lenders' Best Rates
Loan Type	New Purchase	Refinance
30-Year Fixed	7.11%	7.71%
FHA 30-Year Fixed	6.91%	7.27%
Jumbo 30-Year Fixed	6.45%	6.45%
15-Year Fixed	6.43%	6.66%
5/6 ARM	7.50%	7.69%

Today's Mortgage Rate Averages: New Purchase

Rates on 30-year mortgage rates finally dropped by more than a minimal amount, after more than a week of holding roughly steady. The 30-year average subtracted 7 basis points Thursday, reducing the average to 7.11%. Though it's still 20 basis points higher than the 7-month low notched on Dec. 27—when the average plunged to 6.91%—Thursday's average is the lowest in almost two weeks. And it's dramatically lower than the historic 23-year peak of 8.45% recorded in October. Thursday rates on 15-year new purchase loans meanwhile moved the other way, climbing 7 basis points to reach 6.43%. That takes the 15-year average to its most expensive level in more than four weeks, after sinking to a 7-month low of 6.10% on Dec. 28. In October, 15-year rates soared to a 7.59% peak, the most expensive average since 2000. The jumbo 30-year average meanwhile marked time for a fifth day, holding Thursday at 6.45%. That's compared to a 6.31% low from the previous week. Though daily historical jumbo rates are not available before 2009, it's estimated that the 7.52% peak reached in October was the most expensive jumbo 30-year average in more than 20 years. Besides the 30-year average, only one other loan type showed a notable decline Thursday, with the VA 30-year average plummeting 27 basis points. The biggest gainers were the 10-year fixed and the 10/6 adjustable-rate averages, with each added 8 basis points. Most other loan types were flat or showed minimal movement.

National Averages of Lenders' Best Rates - New Purchase
Loan Type	New Purchase Rates	Daily Change
30-Year Fixed	7.11%	-0.07
FHA 30-Year Fixed	6.91%	-0.03
VA 30-Year Fixed	6.76%	-0.27
Jumbo 30-Year Fixed	6.45%	No Change
20-Year Fixed	6.96%	+0.04
15-Year Fixed	6.43%	+0.07
FHA 15-Year Fixed	6.88%	+0.01
Jumbo 15-Year Fixed	6.53%	No Change
10-Year Fixed	6.33%	+0.08
10/6 ARM	7.59%	+0.08
7/6 ARM	7.55%	No Change
Jumbo 7/6 ARM	6.20%	No Change
5/6 ARM	7.50%	-0.02
Jumbo 5/6 ARM	6.30%	No Change

Today's Mortgage Rate Averages: Refinancing

Refinancing rates were a little flatter Thursday than their new purchase siblings. The 30-year refi average gave up just 2 basis points, increasing the spread between 30-year new purchase and refi rates to a wide 60 basis points. The refi average for 15-year loans meanwhile added 4 basis points, while jumbo 30-year refi rates again held steady. The biggest refi rate mover Thursday was the VA 30-year average, which climbed 11 basis points, while the 20-year fixed and 7/6 ARM refi averages tacked on 8 points.

National Averages of Lenders' Best Rates - Refinance
Loan Type	Refinance Rates	Daily Change
30-Year Fixed	7.71%	-0.02
FHA 30-Year Fixed	7.27%	-0.03
VA 30-Year Fixed	7.30%	+0.11
Jumbo 30-Year Fixed	6.45%	No Change
20-Year Fixed	7.33%	+0.08
15-Year Fixed	6.66%	+0.04
FHA 15-Year Fixed	6.98%	+0.02
Jumbo 15-Year Fixed	6.53%	No Change
10-Year Fixed	6.52%	+0.05
10/6 ARM	7.72%	+0.01
7/6 ARM	7.71%	+0.08
Jumbo 7/6 ARM	6.30%	No Change
5/6 ARM	7.69%	No Change
Jumbo 5/6 ARM	6.30%	No Change

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 type, and size, in addition to individual lenders' varying risk management strategies. The states with the cheapest 30-year new purchase rates were Vermont, Arkansas, Delaware, North Dakota, and Wyoming, while the states with the most expensive rates were Nevada, Oregon, Arizona, Georgia, and Washington.

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 three meetings, the last of which concluded Dec. 13. Though Fed Chair Jerome Powell indicated the rate-setting committee is leaving the possibility of another rate hike on the table, should inflation not progress further downward as projected, data released with the recent Fed announcement show that none of the 19 Fed members expect another rate increase. In fact, the committee's median expectation is that three rate cuts will be implemented by the end of 2024, with 80% predicting two to four rate decreases. The Fed's next rate-setting meeting will conclude on Jan. 31.

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.