Mortgage Rates in 2023: Near 21-Year Highs with 30-Year Fixed at 7.67%

Mortgage Rate Update – August 21, 2023

Mortgage rates remain elevated, maintaining levels close to their highest point in over two decades. The 30-year fixed mortgage average slightly decreased by a few basis points to 7.67%, while the 15-year fixed mortgage inched up by one basis point. Jumbo and adjustable-rate mortgage (ARM) averages held steady with no significant changes.

The current 30-year fixed-rate average stands at 7.67%. Given the wide variability among lenders, it’s essential to shop around to secure the most competitive mortgage rate tailored to your financial profile and loan type.

Market Insights

Freddie Mac’s weekly report highlighted a new 21-year high for 30-year mortgage rates, with an average of 7.09% as of last Thursday—its highest since April 2002. Note that Freddie Mac’s averages differ from daily snapshots since they incorporate a blend of the previous five days’ rates and may include discount points. Our reported averages reflect daily, zero-point rates for a more immediate market view.

Current National Mortgage Rate Averages

On Friday, the 30-year fixed mortgage rate slightly dipped to 7.67% after matching its 21-year peak of 7.70% on Thursday. This peak, also observed on July 6, marks the highest rates since April 2002. Just five weeks ago, this average was notably lower at 7.17%.

Rates for 15-year fixed mortgages remained virtually unchanged, rising by only one basis point to 7.12%, matching its highest level since 2002.

Jumbo 30-year mortgage rates held steady at 6.90%, marking the highest level recorded since 2009. Although historical daily jumbo data prior to 2009 is unavailable, current levels suggest a 21-year peak for jumbo loans as well.

Other jumbo averages and all ARM rates remained flat on Friday.

Refinance rates on Friday mirrored purchase rates closely. The 30-year refinance average decreased by 2 basis points, the 15-year refinance average increased by 1 basis point, and the jumbo 30-year refinance rate remained stable. Slight upticks were seen in 5/6 and 10/6 ARM refinance rates. The spread between 30-year purchase and refinance rates was 29 basis points.

Following a historic low in August 2021, when the 30-year average dropped to 2.89%, mortgage rates have surged dramatically over the past two years. Significant rate hikes occurred in June 2022, October 2022, May 2023, and this summer, pushing 30-year rates to their highest point since April 2002.

Important Considerations

The mortgage rates reported here represent averages and typically differ from advertised teaser rates, which may be selectively promoted based on ideal borrower profiles or require upfront points. Actual mortgage rates depend on individual factors such as credit score, income, and loan specifics, so your rate may vary.

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 borrower credit profiles, loan types, and lender risk strategies. Below is a map showing the lowest mortgage rates currently available by state, assuming an 80% loan-to-value ratio and a credit score between 700 and 760.

Factors Influencing Mortgage Rate Fluctuations

Mortgage rates are influenced by multiple economic and industry factors, including the bond market—especially 10-year Treasury yields—the Federal Reserve’s monetary policy, and competition among lenders and loan products. These variables interact complexly, making it difficult to attribute rate changes to a single cause.

In 2021, mortgage rates stayed relatively low, supported by the Federal Reserve’s bond-buying programs aimed at mitigating pandemic-related economic impacts. However, starting in November 2021, the Fed began tapering these purchases, completing the process in March 2022.

The federal funds rate, set by the Federal Open Market Committee (FOMC), indirectly affects mortgage rates but does not determine them directly. Interestingly, mortgage rates and the federal funds rate can sometimes move in opposite directions.

At its July 26, 2023 meeting, the Fed raised the federal funds rate by 25 basis points to a range of 5.25%–5.50%. Chairman Jerome Powell indicated that future rate decisions will depend on inflation trends and economic conditions, with the possibility of further hikes or a pause at the September 20 meeting.

Our Methodology

The national mortgage rate averages are calculated from the lowest rates offered by over 200 top lenders nationwide. These calculations assume an 80% loan-to-value ratio and a borrower with a FICO credit score between 700 and 760. The rates reflect realistic quotes customers can expect, rather than promotional teaser rates.

The state-level rate map shows the lowest rates currently offered by lenders within each state, using the same assumptions.

If you have news tips or insights about mortgage trends, please contact us at tips@investopedia.com.

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