Today's Mortgage Rates & Trends – September 21, 2022: Rates keep rising – Investopedia
Mortgage rates jumped for a third consecutive day Tuesday, with the 30-year average adding more than a quarter of a point since Thursday to surpass 6.65%, and notching yet another new 14-year high.
Rates on 30-year mortgages extended their pattern of the last three days, adding yet another nine basis points Tuesday to raise the already elevated flagship average to 6.66%. It has now moved up almost half a percentage point over the past eight days, and is once again sitting at its most expensive level since October 2008.
Fifteen-year rates climbed even more Tuesday, tacking on 11 basis points. Now at 5.92%, the 15-year average has again risen to a new 14-year high as well.
Jumbo 30-year rates meanwhile held steady for a second day Tuesday, but that was after spiking an eighth of a percentage point Friday. The current average of 5.64% is the highest level seen since February 2011.
Refinancing rates moved somewhat similarly Tuesday to their new purchase counterparts, with the 30-year refi average rising 14 basis points, 15-year refi rates moving up four points, and the Jumbo 30-year refi average again remaining flat. The cost to refinance with a fixed-rate loan is currently one 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 almost 3.5 percentage points above its August 2021 low of 2.89%. September has seen a new spike, however, with the current 30-year average sitting 28 basis points above June's high.
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.
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.
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.
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