On Wednesday, June 18, the states with the most affordable 30-year new purchase mortgage rates were New York, Florida, Massachusetts, California, Connecticut, Washington, Colorado, and New Jersey, average rates fluctuating between 6.72% and 6.87%. Conversely, West Virginia, Alaska, Mississippi, North Dakota, Wyoming, and Maine, along with a multi-state tie involving Missouri and Nebraska, presented the highest averages, ranging from 6.96% to 7.03%.
The mortgage rates are determined by a multitude of factors, including the state of origination, the lender's operation regions, credit score variations at the state level, average loan size, regulations, and the risk management approaches by the lenders. It's recommended to compare rates across different lenders to procure the best option.
The reported rates might not align directly with the teaser rates advertised online, as these might involve advanced payment points or be skewed towards hypothetical borrowers with exceptionally high credit scores or lower than usual loan amounts. The final rate secured by a borrower depends on factors like credit score, income, among others, hence can deviate from the published averages. The current average rate for 30-year new purchase mortgages, following two consecutive days of decline, stands at 6.90%.
Mortgage rates are influenced by a complex web of macroeconomic and industry factors. The Federal Reserve's reaction to economic pressures brought on by the pandemic, including the purchase of billions of dollars in bonds, played a significant role in keeping the market relatively low in 2021. However, with a steady tapering of bond purchases from November 2021, coupled with aggressive hikes in the federal funds rate to counter inflation, there has been a significant upward trajectory in the mortgage rates over the past two years.
Beginning July 2023, the Fed has maintained a peak federal funds rate for almost 14 months, followed by a series of reductions starting September. However, it remains uncertain whether the central bank will introduce further cuts in the coming months.
Data related to national and state averages are procured from the Zillow Mortgage API, based on a loan-to-value (LTV) ratio of 80% and an applicant credit score ranging from 680–739. This should give borrowers a fair idea of what quotes to expect from lenders based on their qualifications, though individual results may vary from the advertised teaser rates.