30-Year Mortgage Rates Drop to 7.06% in June 2023 – Lowest in Five Weeks

June 21, 2023 Mortgage Rate Update

Mortgage interest rates showed a notable decline on Tuesday, with the average 30-year fixed-rate mortgage falling to 7.06%, marking the lowest level in five weeks since May 17. In contrast, jumbo loan rates held steady, showing no significant changes.

Current National Mortgage Rate Averages

The 30-year fixed mortgage rate decreased by 8 basis points, settling at 7.06%. This represents the most affordable rate since it dipped below 7.1% in mid-May. The 15-year fixed-rate mortgage also edged down slightly by 2 basis points to 6.37%, remaining below its 15-year peak of 7.03% recorded last October.

Jumbo loan rates, including the 30-year jumbo average at 6.39%, remained unchanged. This level is considered a 14-year high, and it has been consistently observed since late May.

Refinancing rates mirrored these trends, with the 30-year refinance average dropping by 8 basis points and the 15-year refi average falling by 3 basis points. The jumbo 30-year refinance rate remained flat. The difference between new purchase and refinance 30-year rates currently stands at 27 basis points.

Following historic low rates in August 2021, mortgage rates soared throughout 2022, reaching a 20-year high of 7.65% on May 26, 2023. The recent decline suggests a potential easing in borrowing costs for homebuyers and refinancers alike.

Important Note

Displayed rates reflect averages and may differ from advertised teaser rates, which often require upfront points or assume ideal borrower profiles with excellent credit and smaller loan amounts relative to home value.

Use our Mortgage Calculator to estimate monthly payments based on 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 state-by-state comparison of the lowest available mortgage rates based on current data.

Factors Influencing Mortgage Rate Fluctuations

Mortgage rates are influenced by complex factors including bond market trends—especially 10-year Treasury yields—Federal Reserve monetary policies, and competition among lenders. These elements interact in ways that make pinpointing a single cause for rate changes challenging.

Throughout 2021, the Federal Reserve's bond-buying programs helped keep rates low. However, starting November 2021, the Fed tapered these purchases, ending them by March 2022, which contributed to rising mortgage rates.

The federal funds rate, set by the Federal Open Market Committee (FOMC), also indirectly affects mortgage rates. As of the latest meeting in June 2023, the Fed paused interest rate hikes, maintaining the federal funds rate between 5.00% and 5.25%. Despite this pause, future increases remain possible, with officials projecting up to an additional 50 basis points hike before year-end.

Methodology

National average rates are computed from offers by over 200 leading lenders, assuming an 80% loan-to-value ratio and a borrower credit score between 700 and 760. These averages provide a realistic expectation of rates borrowers may encounter, differing from promotional teaser rates.

The state-level rate map reflects the lowest current rates reported by lenders in each state under the same loan and credit assumptions.

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