National average of best interest rates from financial institutions – New purchase loan type New purchase interest rate Daily change 30 year fixed 6.81% -0.12 FHA 30 year fixed 6.51% -0.24 VA 30 year fixed 6.23% -0.11 20 year fixed 6.73% – 0.13 15 year fixed 5.84% -0.09 FHA 15 year fixed 6.25% -0.03 10 year fixed 6.01% No change 7/6 ARM 7.53% -0.02 5/6 ARM 7.56% +0.01 Jumbo 30 year fixed 6.87% – 0.08 Jumbo 15 year fixed 6.93% -0.04 Jumbo 7/6 ARM 7.39% +0.01 Jumbo 5/6 ARM 7.47% -0.02 Delivered via Zillow Mortgage API
Weekly Freddie Mac average
Freddie Mac, a buyer of government-backed mortgages, releases the weekly average of 30-year mortgage rates every Thursday. Yesterday's reading rose another 7 basis points to 6.79%, while just six weeks ago the reading was 6.08%, the lowest average in two years. Last October, Freddie Mac's average stock price rose to a 23-year historical high of 7.79%.
Freddie Mac's average differs from the 30-year interest rate we report because Freddie Mac blends interest rates from the previous five days to calculate a weekly average. In contrast, Investopedia's 30-year average is a daily measurement and provides a more accurate and timely indicator of rate movements. Additionally, the loan criteria involved (such as down payment amount, credit score, inclusion of discount points, etc.) differ between Freddie Mac's methodology and our proprietary methodology.
Use our mortgage calculator to calculate your monthly payments for different loan scenarios.
The rates we publish are not directly comparable to teaser rates advertised online. Because these rates have been hand-picked to be the most attractive compared to the average values shown here. Teaser interest rates may include paying points upfront, or may be based on a hypothetical borrower with a very high credit score, or on a smaller-than-usual loan. The interest rate you ultimately secure is determined based on your credit score, income, and other factors, so it may differ from the average you see here.
What causes mortgage rates to rise or fall?
Mortgage interest rates are determined by a complex interplay of macroeconomic and industry factors, including:
Because they can vary simultaneously, it is generally difficult to attribute changes to a single factor.
Due to macroeconomic factors, the mortgage market remained relatively low for most of 2021. In particular, the Federal Reserve was buying billions of dollars in bonds in response to economic pressures from the pandemic. This bond purchasing policy has a significant impact on mortgage interest rates.
However, the Fed began reducing its bond purchases in November 2021, and continued to reduce them significantly every month until March 2022, when they effectively reached zero.
From then until July 2023, the Fed aggressively raised the federal funds rate to combat the highest inflation in decades. The federal funds rate can affect mortgage interest rates, but it does not directly affect them. In fact, the federal funds rate and mortgage rates can move in opposite directions.
However, given the historic speed and magnitude of the Fed's rate hikes in 2022 and 2023 (raising the base rate by 5.25 percentage points in 16 months), even the indirect impact of the federal funds rate has not increased over the past two years. This has had a dramatic effect on mortgage interest rates. year.
The Fed kept the federal funds rate at its highest level for nearly 14 months starting in July 2023. But on September 18, the central bank announced its first interest rate cut, with a series of cuts expected in 2024 and possibly 2025. This initial reduction was 0.50 percentage points.
Yesterday, the Fed announced an additional rate cut of 0.25 percentage points, bringing the federal funds rate from 4.5% to 4.75%. With this rate cut, the federal funds rate will be at its lowest level since March 2023.
The Fed's next interest rate announcement will be made on December 18th.
How to track mortgage interest rates
The national and state averages listed above are based on 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 of 80%. Provided as is via. Range 680-739. The resulting interest rate represents what a borrower should expect when receiving a quote from a lender based on their qualifications and may differ from the advertised teaser rate. © Zillow, Inc., 2024. Use is subject to the Zillow Terms of Use.
