States like New York, California, Florida, Colorado, Connecticut, Texas, and Washington witnessed the lowest 30-year refinance rates ranging between 6.87% and 6.98% on a particular Thursday. On the contrary, West Virginia, New Hampshire, North Dakota, Kentucky, Hawaii, Wyoming, South Dakota, Rhode Island, Montana, and Alaska registered the highest refinance rates, averaging between 7.10% and 7.13% the same day.
Refinance rates for mortgages vary across different states due to several influencing factors. These include state-level credit scores variations, different loan size averages, various regulations, and diverse lender risk management strategies. Therefore, obtaining the most advantageous mortgage deal usually involves comparing rates across different lenders.
Over four consecutive days, 30-year refinance mortgage rates have decreased, eventually flattening the previous week's surge. The average refinance rate for this type of mortgage dropped to 7.04%, which indicates an improvement compared to May's 7.32% peak, the highest in 10 months.
However, in March, rates fell to an average of 6.71%, marking the lowest rate in 2025. Moreover, in September of the preceding year, 30-year refinance rates reached a two-year low of 6.01%.
Online advertised teaser rates usually don't directly correspond with the published rates, as these are chosen for their attractiveness. Factors such as credit score, income, and several others determine the actual secured rates, which may vary from the average rates.
A mix of industry and macroeconomic factors drive the determination of mortgage rates and cause simultaneous fluctuations, making it challenging to attribute changes to individual elements. For example, the Federal Reserve's bond-buying policy, implemented in response to the pandemic's economic pressures, significantly influences mortgage rates.
However, these purchases began tapering in November 2021, finally reaching net zero in March 2022. This tapering, coupled with aggressive raising of the federal funds rate between that time and July 2023 to combat inflation, resulted in a substantial rise in mortgage rates over two years.
After maintaining peak federal funds rate for almost 14 months from July 2023, the Fed announced a 0.50 percentage point rate cut in September. This cut was followed by two quarter-point reductions in November and December. Still, the central bank chose to hold rates steady at its third meeting of the new year, indicating potential multiple rate-hold announcements in 2025.
Data for these average state and national rates are obtained from the Zillow Mortgage API and apply to applicants with a loan-to-value ratio of 80% and a credit score ranging from 680 to 739. Thus, the resulting rates may differ from teaser rates and reflect the quotes borrowers should expect based on their qualifications.