Rates on 30-year mortgages moved notably downward Monday, subtracting 10 basis points to sink to a 7.07% average. Thirty-year rates have moved in a range a bit above 7% every day but one this year. Almost all other loan averages also declined Monday, though some jumbo rates were flat.

Because rates vary widely across lenders, 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	7.07%	7.66%
FHA 30-Year Fixed	6.99%	7.30%
Jumbo 30-Year Fixed	6.57%	6.58%
15-Year Fixed	6.40%	6.65%
5/6 ARM	7.53%	7.66%

Today's Mortgage Rate Averages: New Purchase

The 30-year mortgage average fell a tenth of a percentage point Monday, dropping to 7.07%. Aside from one day this year when rates dipped into 6% territory, the last three weeks have seen the flagship average bobbing around between 7.04% and 7.24%. Thirty-year rates remain well below the historic 23-year peak of 8.45% that we saw in October. The 15-year new purchase average also declined Monday, subtracting 5 basis points to rest at 6.40%. That's still three-tenths of a percentage point above the seven-month low of 6.10% registered in late December. But back in October, 15-year rates soared to a 7.59% peak, the most expensive average since 2000. The jumbo 30-year average remained steady for a third day at 6.57%, which is about a quarter point above its recent low of 6.31%. Though daily historical jumbo rates are 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. No new purchase averages climbed Monday, though in addition to the jumbo 30-year average, rates on jumbo 15-year and jumbo 7/6 adjustable-rate loans marched in place. The biggest decliners Monday were the VA 30-year and the 10/6 ARM averages, which each sank 18 basis points.

National Averages of Lenders' Best Rates - New Purchase
Loan Type	New Purchase Rates	Daily Change
30-Year Fixed	7.07%	-0.10
FHA 30-Year Fixed	6.99%	-0.01
VA 30-Year Fixed	6.82%	-0.18
Jumbo 30-Year Fixed	6.57%	No Change
20-Year Fixed	6.90%	-0.08
15-Year Fixed	6.40%	-0.05
FHA 15-Year Fixed	6.79%	-0.06
Jumbo 15-Year Fixed	6.66%	No Change
10-Year Fixed	6.34%	-0.02
10/6 ARM	7.47%	-0.18
7/6 ARM	7.49%	-0.04
Jumbo 7/6 ARM	6.33%	No Change
5/6 ARM	7.53%	-0.08
Jumbo 5/6 ARM	6.30%	-0.13

Today's Mortgage Rate Averages: Refinancing

Every refinancing rate average was down or flat Monday except for the 30-year refi average, which inched up 2 basis points. That extends the spread between 30-year new purchase and refi rates to a wide 59 basis points. Like their new purchase siblings, the 15-year refi average subtracted 5 basis points while the jumbo 30-year refi average held steady. Monday's biggest refi rate reductions were for 7/6 ARM refi loans, whose average plummeted 30 basis points, and the 10/6 ARM average, which gave up 20 basis points.

National Averages of Lenders' Best Rates - Refinance
Loan Type	Refinance Rates	Daily Change
30-Year Fixed	7.66%	+0.02
FHA 30-Year Fixed	7.30%	-0.10
VA 30-Year Fixed	7.34%	-0.09
Jumbo 30-Year Fixed	6.58%	No Change
20-Year Fixed	7.23%	-0.09
15-Year Fixed	6.65%	-0.05
FHA 15-Year Fixed	6.87%	-0.08
Jumbo 15-Year Fixed	6.66%	No Change
10-Year Fixed	6.54%	-0.02
10/6 ARM	7.59%	-0.20
7/6 ARM	7.69%	-0.30
Jumbo 7/6 ARM	6.43%	No Change
5/6 ARM	7.66%	-0.03
Jumbo 5/6 ARM	6.30%	-0.13

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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 type, and size, in addition to individual lenders' varying risk management strategies. The states with the cheapest 30-year new purchase rates were Mississippi, Iowa, Louisiana, Vermont, and Wisconsin, while the states with the most expensive rates were Nevada, Arizona, Oregon, Minnesota, 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 Nov. 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. 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.