2023 June: 30-Year Fixed Mortgage Rate Drops to 7.18% While Refinance Rates Climb to 7.57%

Mortgage Rate Update - June 13, 2023

The average interest rate for a new 30-year fixed mortgage purchase declined by 8 basis points on Monday, settling at 7.18%. This dip reversed the slight increase observed last Friday. Conversely, the average 30-year refinance mortgage rate rose by 6 basis points to 7.57%, further widening the difference between purchase and refinance rates. Adjustable-rate mortgages (ARMs) such as 10/6, 7/6, and 5/6 saw marginal rate increases.

Current National Mortgage Rate Averages

The 30-year fixed mortgage rate for new purchases decreased to 7.18% on Monday after a 4 basis point rise on Friday, reverting to levels last seen on June 2. Since June 1, rates have oscillated between 7.13% and 7.26%. Notably, on May 26, the average reached an estimated two-decade peak of 7.65%.

Jumbo mortgage rates for new purchases remained steady across all terms, including 30-year, 15-year, 7/6 ARM, and 5/6 ARM loans. The 30-year jumbo fixed mortgage rate held at 6.39%, marking approximately a 14-year high based on available data. Jumbo refinance rates also showed no change. The spread between new purchase and refinance 30-year loan rates widened to 39 basis points on Monday.

Rates for 15-year fixed mortgages slightly decreased by 2 basis points to 6.40%, returning to last Friday’s level. Similar to the 30-year term, the 15-year rate surged in late May but remains below the 7.03% peak recorded in October of the previous year, a 15-year high.

Following a historic decline in mortgage rates in August 2021, rates surged dramatically throughout the first half of 2022. The 30-year average climbed to 6.38% by June 2022—more than double the 2.89% rate from just ten months earlier. Subsequent spikes in September and October 2022 pushed the 30-year rate to a 20-year high, surpassing previous summer peaks by 1.2 percentage points.

Recent increases in 30-year rates brought the average 7 basis points above the October 2022 peak. However, precise historical comparisons beyond 2009 are limited due to the absence of daily published averages before that year.

Important Considerations

Displayed rates typically differ from advertised teaser rates online, which often highlight the most attractive offers. These teaser rates may require upfront points, assume borrowers with excellent credit scores, or smaller loan amounts relative to home value.

Use our Mortgage Calculator to estimate monthly payments for various loan scenarios.

Lowest Mortgage Rates by State

Mortgage rates vary by state due to differences in average credit scores, loan types, loan sizes, and lender risk strategies. State-specific rates reflect these local market factors.

Factors Influencing Mortgage Rate Fluctuations

Mortgage rates are influenced by complex macroeconomic and industry dynamics, including movements in the bond market—especially 10-year Treasury yields—the Federal Reserve’s monetary policies regarding government-backed mortgage funding, and competition among lenders and loan products. Multiple factors often interact simultaneously, making it difficult to attribute rate changes to a single cause.

In 2021, mortgage rates remained relatively low, supported by the Federal Reserve’s extensive bond-buying program responding to pandemic-related economic challenges. However, starting in November 2021, the Fed began tapering these purchases, fully ending them by March 2022.

The federal funds rate, set by the Federal Open Market Committee (FOMC), also indirectly affects mortgage rates. The FOMC meets regularly, with the next meeting commencing today and a rate decision expected on June 14, 2023.

Methodology

The national averages presented are based on the lowest rates offered by over 200 leading lenders nationwide. Calculations assume an 80% loan-to-value (LTV) ratio and a borrower with a FICO credit score between 700 and 760. These averages provide realistic expectations for typical borrower quotes, which may differ from promotional teaser rates.

State-level lowest rates are similarly derived, reflecting the best available offers under the same assumptions.

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