Today's Mortgage Rates & Trends - June 2, 2023: Decline Continues - Investopedia

The average rate for a 30-year mortgage fell for a third day in a row Thursday, dropping another 16 basis points to 7.13%, the lowest rate in two weeks. The 30-year refinance rate fell 29 basis points to 7.43%. Both rates are now more than a half percent below last Friday's highs of 7.65% and 8.00%, respectively.

Most other new purchase and refinance rates also dropped Thursday, while just two loan types ticked up slightly: 10/6 ARM and 5/6 ARM. A few other rates were unchanged, including those for both new and refi jumbo 30- and 15-year mortgages.

National Averages of Lenders' Best Rates
Loan Type	Purchase	Refinance
30-Year Fixed	7.13%	7.43%
FHA 30-Year Fixed	7.14%	7.39%
Jumbo 30-Year Fixed	6.27%	6.27%
15-Year Fixed	6.38%	6.56%
5/6 ARM	7.15%	7.28%

National averages of the lowest rates offered by more than 200 of the country's top lenders, with a loan-to-value ratio (LTV) of 80%, an applicant with a FICO credit score of 700–760, and no mortgage points.

Today's National Mortgage Rate Averages

The 30-year mortgage average dropped 16 basis points on Thursday, falling even further from what was estimated to be a 20-year high of 7.65% on Friday, May 26. Rates on 30-year loans had been on a fast-and-furious rise since May 12, climbing 83 basis points across two weeks. Thursday's average is down to 7.13%, dropping to its lowest point in two weeks.

Thursday's 15-year average mortgage rate dropped as well, now down another 11 basis points to 6.38%. Though 15-year rates had also soared for two weeks, the average still sits well under its October peak, which was a 15-year high of 7.03%.

The jumbo 30-year average mortgage rate sat still at 6.27% Thursday, with its refi counterpart doing the same.

Refinancing rates moved generally in line with new purchase rates Thursday. The 30-year refi dropped to 7.43%, down 29 basis points, a drop of more than a half percent from the rate seen on Friday, May 26. The gap between new purchase and refi rates for a 30-year loan was 30 basis points Thursday.

After a historical rate plunge in August 2021, mortgage rates skyrocketed in the first half of 2022. The 30-year average shot to 6.38% by June 2022, which was more than double the rate of 2.89% seen just 10 months earlier. Then an even more dramatic surge in September and October 2022 outdid the June peak, with the 30-year average ultimately climbing another 1.2 percentage points and recording a 20-year high.

It's difficult to nail down how far back we'd have to go to find 30-year rates higher than what we saw on Friday, May 26, since daily rate averages weren't published before 2009.

The rates you see here generally won’t compare directly with teaser rates you see advertised online, since those rates are cherry-picked as the most attractive. They may involve paying points in advance, or they may be selected based on a hypothetical borrower with an ultra-high credit score or taking a smaller-than-typical loan given the value of the home.

National Averages of Lenders' Best Rates - New Purchase
	New Purchase	Daily Change
30-Year Fixed	7.13%	-0.16
FHA 30-Year Fixed	7.14%	-0.19
VA 30-Year Fixed	7.08%	-0.29
Jumbo 30-Year Fixed	6.27%	No Change
20-Year Fixed	6.96%	-0.11
15-Year Fixed	6.38%	-0.11
Jumbo 15-Year Fixed	6.39%	No Change
10-Year Fixed	6.34%	-0.08
10/6 ARM	7.27%	+0.01
7/6 ARM	7.07%	-0.02
Jumbo 7/6 ARM	6.08%	-0.13
5/6 ARM	7.15%	+0.01
Jumbo 5/6 ARM	6.31%	No Change

National Averages of Lenders' Best Rates - Refinance
Loan Type	Refinance	Daily Change
30-Year Fixed	7.43%	-0.29
FHA 30-Year Fixed	7.39%	-0.31
VA 30-Year Fixed	7.33%	-0.12
Jumbo 30-Year Fixed	6.27%	No Change
20-Year Fixed	7.38%	-0.26
15-Year Fixed	6.56%	-0.09
Jumbo 15-Year Fixed	6.39%	No Change
10-Year Fixed	6.49%	-0.12
10/6 ARM	7.34%	-0.06
7/6 ARM	7.33%	No Change
Jumbo 7/6 ARM	6.19%	-0.12
5/6 ARM	7.28%	+0.02
Jumbo 5/6 ARM	6.31%	No Change

Calculate monthly payments for different loan scenarios with our Mortgage Calculator.

Lowest Mortgage Rates by State

The lowest mortgage rates available vary depending on the state where originations occur. Mortgage rates can be influenced by state-level variations in credit score, average mortgage loan type, and size, in addition to individual lenders' varying risk management strategies.

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 the bond market, including 10-year Treasury yields; the Federal Reserve's current monetary policy, especially as it relates to funding government-backed mortgages; and competition between mortgage lenders and across loan types. Because fluctuations can be caused by any number of these at once, it's generally difficult to attribute the 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 (and not the more publicized federal funds rate) is a major influencer on mortgage rates.

But starting in November 2021, the Fed began tapering its bond purchases downward, making sizable reductions each month until reaching net-zero in March 2022.

The Fed's rate and policy committee—the Federal Open Market Committee (FOMC)—meets every six to eight weeks. The next scheduled meeting will conclude on June 14.

Methodology

The national averages cited above were calculated based on the lowest rate offered by more than 200 of the country's top lenders, assuming a loan-to-value ratio (LTV) of 80% and an applicant with a FICO credit score in the 700–760 range. The resulting rates are representative of what customers should expect to see when receiving actual quotes from lenders based on their qualifications, which may vary from advertised teaser rates.

For our map of the best state rates, the lowest rate currently offered by a surveyed lender in that state is listed, assuming the same parameters of an 80% LTV and a credit score between 700–760.

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