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The prices you see here are not usually directly comparable to the teaser prices you see advertised online, as these are carefully selected for the most attractive prices and these prices are averages. The teaser price may involve paying points upfront or may be based on a hypothetical borrower with a super-high credit score or accepting a lower amount than a typical loan. The mortgage rate you end up getting will be based on your credit score, income, and more, so it may be higher or lower than the averages you see here.
Lowest mortgage rates by state
The lowest mortgage rates available vary by state of origin. In addition to each lender’s different risk management strategies, mortgage rates can be affected by state-level differences in credit scores, average mortgage type and size.
The states with the lowest 30-year new purchase averages are Vermont, Delaware, North Carolina, Tennessee, and Alaska, while the states with the highest averages are Oregon, Nevada, Arizona, Minnesota, and Washington state.
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 bond markets, particularly the 10-year Treasury yield
- The Fed’s current monetary policy, particularly as it relates to bond purchases and government-backed mortgage financing
- competition between Mortgage lenders and various loan types
Because fluctuations can be caused by any number of factors simultaneously, it is often difficult to attribute changes to any one factor.
Macroeconomic factors have kept the mortgage market relatively low for much of 2021. In particular, the Federal Reserve has been buying billions of dollars in bonds to deal with the economic pressure caused by the epidemic. bond buying policy Is the main influence on mortgage interest rates.
But starting in November 2021, the Fed began to gradually reduce the scale of bond purchases, making significant cuts every month until it reached net-zero purchases in March 2022.
Since then, the Fed has been aggressively raising interest rates federal funds rate Fighting decades of high inflation. While the federal funds rate can affect mortgage rates, it does not directly affect mortgage rates. In fact, the federal funds rate and mortgage rates can move in opposite directions.
However, given the historical pace and magnitude of the Fed’s rate hikes in 2022 and 2023 (raising the benchmark rate by 5.25 percentage points over the past 18 months), even the indirect impact of the federal funds rate has contributed to the decline in mortgage lending over the past 18 years. The upward impact of interest rates. the past two years.
The Federal Reserve chose to keep interest rates unchanged at its last two meetings, ending on September 20 and November 1.But Fed Chairman Powell made it clear Another rate hike is still possible The next Federal Reserve interest rate decision will be announced on December 13.
The national averages above are based on the lowest interest rates offered by more than 200 of the country’s top lenders, assuming Loan to Value (LTV) 80% and the applicant’s FICO credit score is in the 700–760 range. The rates derived represent what customers should expect to see when receiving an actual offer from a lender based on their qualifications, which may differ from the advertised teaser rates.
Our Best States Rates Map lists the lowest rates currently offered by surveyed lenders in the state, assuming the same parameters of 80% LTV and a credit score between 700-760.