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Sabrina Karl has over two decades of experience writing about savings, CDs, and other banking topics. She is currently a staff writer at Investopedia and one of the country's top experts on how to earn as much as possible on the money you hold in the bank. She previously wrote for Bankrate.com, CreditCards.com, DepositAccounts.com, and RateSeeker.
Published July 30, 2024The states with the lowest 30-year new purchase mortgage rates Monday were New York, Florida, Texas, Hawaii, California, Louisiana, New Jersey, and Washington.
Meanwhile, the states with the most expensive rates were West Virginia, Iowa, Nebraska, Maryland, Washington, D.C., Kansas, and North Dakota.
Mortgage rates vary by the state where they originate. Different lenders operate in different regions, and rates can be influenced by state-level variations in credit score, average loan size, and state-specific regulations. Lenders also have varying risk management strategies that influence the rates they offer.
Since 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 seek.
The rates we publish won’t compare directly with teaser rates you see advertised online since those rates are cherry-picked as the most attractive vs. the averages you see here. Teaser rates may involve paying points in advance or may be based on a hypothetical borrower with an ultra-high credit score or for a smaller-than-typical loan. The rate you ultimately secure will be based on factors like your credit score, income, and more, so it can vary from the averages you see here.
The national average for 30-year new purchase mortgages dipped to 6.75% Friday, a decline of 6 basis points. That keeps rates close to their lowest average since early spring and is an improvement after rates began July above 7%.
| National Averages of Lenders' Best Mortgage Rates | ||
|---|---|---|
| Loan Type | New Purchase | Refinance |
| 30-Year Fixed | 6.68% | 7.46% |
| FHA 30-Year Fixed | 6.58% | 6.42% |
| 15-Year Fixed | 5.81% | 6.15% |
| Jumbo 30-Year Fixed | 6.92% | 7.11% |
| 5/6 ARM | 7.61% | 7.47% |
| Provided via the Zillow Mortgage API | ||
Calculate monthly payments for different loan scenarios with our Mortgage Calculator.
Mortgage rates are determined by a complex interaction of macroeconomic and industry factors, such as:
Because any number of these can cause fluctuations simultaneously, it's generally difficult to attribute any 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 November 2021, the Fed began tapering its bond purchases downward, making sizable monthly reductions until reaching net zero in March 2022.
Between that time and July 2023, the Fed aggressively raised the federal funds rate to fight decades-high inflation. While the fed funds rate can influence mortgage rates, it doesn't directly do so. In fact, the fed funds rate and mortgage rates can move in opposite directions.
But given the historic speed and magnitude of the Fed's 2022 and 2023 rate increases—raising the benchmark rate 5.25 percentage points over 16 months—even the indirect influence of the fed funds rate has resulted in a dramatic upward impact on mortgage rates over the last two years.
The Fed has been maintaining the federal funds rate at its current level since last July, with a seventh consecutive rate hold announced last month. Although inflation has come down considerably, it's still above the Fed's target level of 2%. Until the central bank feels confident inflation is falling sufficiently and sustainably, it has said it's hesitant to start cutting rates.
The Fed will hold four more meetings this year, with the next one scheduled to conclude on July 31.
The national and state averages cited above are provided as is via the Zillow Mortgage API, assuming a loan-to-value (LTV) ratio of 80% (i.e., a down payment of at least 20%) and an applicant credit score in the 680–739 range. The resulting rates represent what borrowers should expect when receiving quotes from lenders based on their qualifications, which may vary from advertised teaser rates. © Zillow, Inc., 2024. Use is subject to the Zillow Terms of Use.
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A floating interest rate is an interest rate that periodically adjusts up or down to reflect economic or financial conditions. It's tied to a benchmark rate or an index.
An interest-only adjustable-rate mortgage (ARM) is an adjustable-rate mortgage in which the borrower delays paying down any principal for a period of time.
A convertible ARM is an adjustable-rate mortgage with the option to convert to a fixed-rate mortgage after a specified period of time.
Adjustment frequency refers to the rate at which an adjustable-rate mortgage rate (ARM) is adjusted once the initial period has expired.
A flexible payment ARM was a type of adjustable-rate mortgage that allowed borrowers to select from four different payment options each month.
An offset mortgage allows money in savings accounts held at the same financial institution as the mortgage to offset the mortgage balance.
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