With a third day of declines, the 30-year mortgage average dropped Wednesday to 7.21%, its cheapest level since early February. Rates also fell across almost every new purchase and refi loan type.

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	7.21%	7.73%
FHA 30-Year Fixed	7.35%	7.85%
Jumbo 30-Year Fixed	6.70%	6.70%
15-Year Fixed	6.61%	6.78%
5/6 ARM	7.67%	7.72%

Today's Mortgage Rate Averages: New Purchase

After shooting up two weeks ago to 7.48%—the most expensive level in almost three months—30-year new purchase rates have come down considerably. Wednesday saw the flagship average sink 10 basis points, after 7 basis points the previous two days. That pushes the average down to 7.21%—its lowest mark since Feb. 12. Given that 30-year rates dipped into 6% territory at the start of February, the current average is still a bit elevated. But the recent trajectory has been downward. Also, rates are notably cheaper than October, when the 30-year average notched a historic 23-year peak of 8.45%. Rates on 15-year new purchase loans fell 7 basis points Wednesday, to a 6.61% average. That's also a low point since Feb. 12—but is still about a half percentage point pricier than we saw just before the new year, when 15-year rates sank to a seven-month low of 6.10%. Last October, however, 15-year rates soared to a 7.59% peak—their highest level since 2000. After jumping last week to a three-month-high of 6.95%, the jumbo 30-year average is down to 6.70% after falling an eighth of a point Wednesday. That's a 3-week low as well. Though daily historical jumbo rates were not available before 2009, it's estimated the 7.52% peak reached in October was the most expensive jumbo 30-year average in more than 20 years. Every new purchase average but one declined Wednesday. The sole climber was 5/6 adjustable-rate loans, whose average rose a minor 4 basis points. The biggest Wednesday drop was for 7/6 adjustable-rate loans, which plummeted 20 basis points. Several other new purchase averages dropped 12 points.

National Averages of Lenders' Best Rates - New Purchase
Loan Type	New Purchase Rates	Daily Change
30-Year Fixed	7.21%	-0.10
FHA 30-Year Fixed	7.35%	-0.05
VA 30-Year Fixed	7.05%	-0.05
Jumbo 30-Year Fixed	6.70%	-0.12
20-Year Fixed	7.02%	-0.12
15-Year Fixed	6.61%	-0.07
FHA 15-Year Fixed	6.78%	-0.03
Jumbo 15-Year Fixed	6.66%	-0.12
10-Year Fixed	6.47%	-0.07
10/6 ARM	7.49%	-0.04
7/6 ARM	7.48%	-0.20
Jumbo 7/6 ARM	6.33%	-0.12
5/6 ARM	7.67%	+0.04
Jumbo 5/6 ARM	6.43%	-0.12

The Weekly Freddie Mac Average

Every Thursday afternoon, Freddie Mac publishes a weekly average of 30-year mortgage rates, and this week's reading subtracted 6 basis points, falling to 6.88%. Back in late October, Freddie Mac's average reached a historic peak of 7.79%—its most expensive level in 23 years. But since then, it has come down significantly, registering a recent low of 6.60% in mid-January.

Freddie Mac’s average differs from our own 30-year average for two notable reasons. First, Freddie Mac calculates a weekly average that blends five previous days of rates, while our Investopedia averages are daily, offering a more precise and timely indicator of rate movement. Second, the rates included in Freddie Mac's survey can include loans priced with discount points, while Investopedia’s averages only include zero-point loans.

Today's Mortgage Rate Averages: Refinancing

Refinancing averages also moved decidedly down almost across the board Tuesday. The 30-year refi average shed 9 basis points, leaving the spread between 30-year new purchase and refi rates to 52 basis points. Rates on 15-year refi loans fell 5 basis points Wednesday, while the jumbo 30-year refi average dropped a bolder 13 points. The only refi average that didn't fall Wednesday was 7/6 ARM loans, whose rates were flat. In addition to the jumbo 30-year refi average, the biggest drops were seen among the three other jumbo averages, which all fell 12 basis points.

National Averages of Lenders' Best Rates - Refinance
Loan Type	Refinance Rates	Daily Change
30-Year Fixed	7.73%	-0.09
FHA 30-Year Fixed	7.85%	-0.05
VA 30-Year Fixed	7.54%	-0.01
Jumbo 30-Year Fixed	6.70%	-0.13
20-Year Fixed	7.39%	-0.06
15-Year Fixed	6.78%	-0.05
FHA 15-Year Fixed	6.91%	-0.06
Jumbo 15-Year Fixed	6.66%	-0.12
10-Year Fixed	6.70%	-0.07
10/6 ARM	7.68%	-0.04
7/6 ARM	7.74%	No Change
Jumbo 7/6 ARM	6.43%	-0.12
5/6 ARM	7.72%	-0.01
Jumbo 5/6 ARM	6.43%	-0.12

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 Mississippi, Louisiana, Hawaii, South Carolina, Iowa, and Kansas, while the states with the most expensive rates were Tennessee, Alabama, Minnesota, Arizona, and Oregon.

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 opted to hold rates steady at its last four meetings, the last of which concluded Jan. 31. Though the central bank's statement signaled that we have almost certainly reached the end of Fed rate hikes in this campaign, Fed Chair Jerome Powell stated that inflation is still too high, and they will therefore proceed cautiously on deciding when to make the first rate cut. Specifically, he indicated it's unlikely they will be ready for any rate reduction by the time of their next meeting, which is scheduled for March 19–20.

After its December meeting, the Fed released quarterly data that showed almost 80% of Fed members expect there to be two to four rate cuts in 2024, with the median expectation being three rate decreases totaling 0.75%. But when in 2024 these will begin—and ultimately how many are implemented this year—is an open question at this time.

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.