Unlock Your Future: Discover State-Specific Mortgage Rates for 2025!
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Looking for the best deal on a mortgage? Here’s the scoop: on Monday, states like New York, Florida, Texas, California, Georgia, Massachusetts, North Carolina, Pennsylvania, and Washington boasted some of the cheapest 30-year new purchase mortgage rates, landing between 6.72% and 6.96%. That’s some serious savings potential, folks!
On the flip side, if you’re in states like Iowa, Alaska, Montana, South Dakota, Washington, D.C., Wyoming, Maine, North Dakota, Rhode Island, or Vermont, brace yourself. Those areas are seeing higher averages, ranging from 7.06% to 7.09%.
Remember, mortgage rates aren’t one-size-fits-all. They can fluctuate based on where you live, influenced by each state’s unique credit score averages, loan sizes, and local regulations. Not to mention, each lender has its own way of assessing risk, which can affect the rates you’re offered.
With such variations, it’s smarter than ever to shop around for the best mortgage option. Whether you’re a first-time buyer or looking to refinance, comparing rates regularly is a must.
Be cautious of flashy teaser rates you see online; they often don’t reflect the average rates available. Those enticing numbers may come with hidden costs, like points paid upfront or be tailored to hypothetical borrowers with top-tier credit scores. The reality is, your rate will depend on factors like your credit score and income, so expect some variation from those dazzling averages.
National Mortgage Rate Averages
On Monday, rates for 30-year new purchase mortgages ticked up by 4 basis points, averaging 6.99%. This figure is inching closer to the six-month peak of 7.02% we saw around Christmas time. Just a few months back in September, rates had plummeted to 5.89%, the lowest in two years—talk about a rollercoaster ride!
| National Averages of Lenders’ Best Mortgage Rates | |
|---|---|
| Loan Type | New Purchase |
| 30-Year Fixed | 6.99% |
| FHA 30-Year Fixed | 6.28% |
| 15-Year Fixed | 6.20% |
| Jumbo 30-Year Fixed | 6.83% |
| 5/6 ARM | 7.29% |
| Provided via the Zillow Mortgage API | |
Want to crunch some numbers? Use our handy Mortgage Calculator to estimate your monthly payments for various loan scenarios.
What Causes Mortgage Rates to Rise or Fall?
Curious about what drives these rates? It’s a mix of macroeconomic trends and industry dynamics, including:
- The current state of the bond market, particularly 10-year Treasury yields
- The Federal Reserve’s monetary policy, especially regarding bond purchasing and government-backed mortgage funding
- Competition among mortgage lenders and variations across loan types
Because these factors often shift at the same time, pinning down the cause of any rate change can be tricky.
In 2021, macroeconomic indicators helped keep mortgage rates low. The Federal Reserve was busy purchasing billions in bonds to stabilize the economy during the pandemic. This bond-buying policy significantly impacted mortgage rates.
However, starting in November 2021, the Fed began to taper its bond purchases, reducing them significantly until halting in March 2022.
From that point onward, the Fed aggressively raised the federal funds rate to combat rampant inflation, a move that ultimately influenced mortgage rates, albeit indirectly. Interestingly, the relationship between the fed funds rate and mortgage rates can sometimes run counter to one another.
With a dramatic increase of 5.25 percentage points in just 16 months, the Fed’s actions have undeniably pushed mortgage rates higher over the past couple of years.
After maintaining peak federal funds rates for nearly 14 months, the Fed recently announced its first rate cut on September 18, lowering by 0.50 percentage points, followed by additional quarter-point cuts in November and December.
However, keep an eye out: the Fed hinted at a slower pace for future cuts, with projections now pointing to just two cuts in 2025 instead of four, leading to a rise in 10-year Treasury yields and impacting mortgage rates.
How We Track Mortgage Rates
The national and state averages mentioned earlier come via the Zillow Mortgage API and assume a loan-to-value (LTV) ratio of 80% (meaning a down payment of at least 20%) and a credit score in the 680–739 range. These rates give you a realistic expectation of quotes from lenders, which may differ from those enticing teaser rates you see advertised.
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