The cheapest 30-year new purchase mortgage rates were recorded in eight states, including New York, California, New Jersey, Kentucky, Indiana, North Carolina, Tennessee, and Texas. These states had average rates ranging between 7.04% and 7.12%. On the contrary, Alaska, Washington D.C., West Virginia, Hawaii, Iowa, New Mexico, and Maryland had the highest 30-year rates, with averages reaching from 7.21% to 7.30%.
The regional variability of mortgage rates is dependent on several factors. Specific lenders operate in different regions, and fluctuations in credit score, average loan size, and regulatory practices across states can influence rates. The lenders' risk management strategies can also affect the rates they offer.
Although rates can vary significantly across lenders, borrowers are advised to regularly compare rates irrespective of the kind of home loan they are seeking. The rates that are published might not directly compare with the enticing teaser rates advertised online. But remember, these rates may involve paying points upfront or are based on a hypothetical borrower with an ultra-high credit score or a smaller-than-average loan size.
The rates for 30-year new purchase mortgages charted higher on Thursday, moving up by 4 basis points. The flagship average reached a high at 7.15%, the priciest level seen since May 2024. However, these rates plunged to a two-year low of 5.89% in September, after sinking to their cheapest average of 6.50% in March.
Mortgage rates are a result of the complex interplay between macroeconomic and industry influences, making it challenging to attribute changes to a specific factor. The Federal Reserve's bond-buying policies have significantly influenced mortgage rates. As the Fed gradually reduced bond purchases since November 2021, culminating in net zero in March 2022, we saw a steep rise in mortgage rates due to the indirect influence of federal fund rate increases.
The federal funds rate remained at peak levels for around 14 months, starting from July 2023. A rate cut was announced in September, with quarter-point reductions following in January, November, and December. Several rate-hold announcements are expected in 2025, with only eight rate-setting meetings scheduled annually.
These mortgage rates are estimates from the Zillow Mortgage API, factoring in loan-to-value (LTV) ratios of 80% (i.e., a down payment of at least 20%) and applicant credit scores ranging from 680–739. These rates demonstrate potential quotes borrowers could receive based on their specific qualifications, which could differ from advertised teaser rates.