Mortgage Rates Dip Again: What This Means for Your Home Purchase!
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| Current National Averages of Top Lenders’ Rates – New Purchases | ||
|---|---|---|
| Loan Type | New Purchase Rates | Daily Change |
| 30-Year Fixed | 6.93% | -0.06 |
| FHA 30-Year Fixed | 6.28% | No Change |
| VA 30-Year Fixed | 6.45% | -0.09 |
| 20-Year Fixed | 6.84% | -0.09 |
| 15-Year Fixed | 6.18% | -0.08 |
| FHA 15-Year Fixed | 6.40% | No Change |
| 10-Year Fixed | 6.17% | -0.14 |
| 7/6 ARM | 7.30% | -0.02 |
| 5/6 ARM | 7.37% | -0.05 |
| Jumbo 30-Year Fixed | 6.86% | -0.06 |
| Jumbo 15-Year Fixed | 6.80% | -0.01 |
| Jumbo 7/6 ARM | 6.98% | -0.22 |
| Jumbo 5/6 ARM | 7.13% | -0.03 |
Your Weekly Freddie Mac Update
Every Thursday brings fresh insights, thanks to Freddie Mac, the federal powerhouse in mortgage financing. Last week, mortgage rates took a notable leap, rising 13 basis points to an average of 6.85%—following a 12 basis point uptick the previous week. Just a few weeks prior, on September 26, rates had plunged to a low of 6.08%. But hang onto your hats; back in October 2023, we saw rates reach a staggering 23-year high of 7.79%!
It’s important to note that Freddie Mac’s averages differ from the daily rates we share here. Freddie Mac tallies up a weekly average that incorporates five days’ worth of rates, while we present a daily snapshot that captures the latest shifts—offering you a more immediate look at market trends. Moreover, our criteria for loans—like down payment size and borrower credit scores—may vary significantly.
Want to crunch some numbers on your mortgage payments? Check out our Mortgage Calculator to explore different scenarios!
Beware! The rates we showcase here may differ from the eye-catching teaser rates floating around online. Those enticing rates are often crafted with selective criteria—think ultra-high credit scores or smaller loans—while the averages we report reflect what you can typically expect based on common borrower qualifications. Your actual rate will depend on various factors: credit score, income, and more.
What Drives Mortgage Rates Up or Down?
Ever wonder what makes mortgage rates fluctuate? It’s a blend of several economic and market forces, including:
- The movements in the bond market, particularly the yield on 10-year Treasuries
- The current monetary policy of the Federal Reserve, especially regarding bond purchases and government-backed mortgage funding
- Intense competition among various mortgage lenders and loan types
With so many factors in play, pinpointing exactly why rates change can be a tricky business!
For most of 2021, macroeconomic trends kept mortgage rates at a relatively low level. The Federal Reserve, in particular, was buying billions of dollars in bonds as a response to the economic fallout from the pandemic. This policy significantly influenced mortgage rates.
Starting in November 2021, however, the Fed began reducing these bond purchases, continuing to scale down until reaching a standstill by March 2022.
Between then and July 2023, the Fed raised the federal funds rate sharply to combat soaring inflation. Even though the fed funds rate doesn’t dictate mortgage rates directly, its influence is undeniable, and the recent hikes have certainly pushed mortgage rates higher.
The Fed has held the federal funds rate at its peak for nearly 14 months, starting in July 2023. But on September 18, they announced a 0.50 percentage points cut, followed by quarter-point cuts on November 7 and December 18.
Still, the Fed’s cautious stance amidst persistent inflation means potential rate cuts may be slow and measured, leading to increased yields on 10-year Treasuries, which in turn pushes mortgage rates upward.
How We Monitor Mortgage Rates
The national and state averages provided are sourced via a reputable mortgage API, based on a typical loan-to-value (LTV) ratio of 80% (meaning a 20% down payment) and a credit score in the 680–739 range. These rates reflect what borrowers can realistically expect when obtaining quotes from lenders, which may differ from flashy teaser rates you might encounter out there.
