Mortgage Rates Update May 2023: 30-Year Fixed Drops to 6.81% - Latest Trends & Prices

30-year mortgage rates fall by 0.125%, reaching lowest point in nearly three weeks

Mortgage rates experienced a notable decline on Wednesday, with most averages dropping by double-digit basis points. The 30-year fixed-rate mortgage average decreased by an eighth of a percentage point, settling at 6.81%. Only two jumbo loan products maintained their previous levels.

Current National Mortgage Rate Averages

The 30-year fixed mortgage rate saw its largest one-day drop in nearly three weeks, decreasing by 13 basis points to 6.81% on Wednesday. This marks the lowest rate since April 14. Earlier this year, rates hit a five-month low of 6.11% in February after peaking at 7.58% in October 2022.

The 15-year fixed mortgage rate declined more sharply, dropping a full quarter point to 5.96%, dipping below 6% for the first time since April 13. The 15-year average also reached a low of 5.23% in February and a high of 7.03% last October.

The jumbo 30-year fixed rate remained steady for the fourth consecutive day at 6.02%, just 25 basis points below its 12-year peak of 6.27% recorded last October. The Jumbo 5/6 ARM also stayed flat, while other jumbo loan averages decreased.

Refinancing rates mirrored the trend of new purchase rates. The 30-year refinance average fell by 21 basis points, a more substantial drop compared to the 15-year refinance average, which declined by 14 basis points. The jumbo 30-year refinance rate remained unchanged. Currently, refinancing a 30-year mortgage costs approximately 27 basis points more than securing a new 30-year mortgage.

Following a historic low in August 2021, mortgage rates surged throughout the first half of 2022. The 30-year average peaked at 6.38% in mid-June, nearly 3.5 percentage points above the 2.89% low from summer 2021. The rate spike in September and October 2022 pushed the 30-year average even higher by 1.2 percentage points beyond the June peak.

Important Information

The mortgage rates presented here reflect averages from over 200 top U.S. lenders and may differ from advertised teaser rates. Advertised rates often highlight the most attractive offers, which may require upfront points or assume borrowers with exceptional credit scores and smaller loan amounts relative to home value.

Use our Mortgage Calculator to estimate monthly payments tailored to your loan scenario.

Lowest Mortgage Rates by State

Mortgage rates vary by state due to differences in average credit scores, loan terms, loan sizes, and lenders' risk management strategies. State-specific rates reflect these variations and can impact your borrowing costs.

Factors Influencing Mortgage Rate Changes

Mortgage rates are influenced by a complex mix of macroeconomic and industry factors, including movements in the bond market—especially 10-year Treasury yields—the Federal Reserve’s monetary policies impacting government-backed mortgages, and competition among lenders and loan types. Because multiple factors often interact simultaneously, pinpointing a single cause for rate changes is challenging.

Throughout much of 2021, macroeconomic conditions and the Federal Reserve’s bond-buying programs kept mortgage rates relatively low. The Fed’s bond purchases, rather than the federal funds rate, play a significant role in shaping mortgage costs.

Starting in November 2021, the Fed began tapering its bond purchases, reducing them monthly until ceasing in March 2022. The Federal Open Market Committee (FOMC), which sets monetary policy, meets every six to eight weeks, with the next meeting scheduled for June.

Methodology

The national mortgage rate averages are calculated based on the lowest rates offered by over 200 leading lenders, assuming an 80% loan-to-value ratio (LTV) and a borrower credit score between 700 and 760. These figures represent realistic quotes borrowers with similar profiles can expect, differing from promotional teaser rates.

The state-level lowest rates shown are similarly based on lender offers under the same assumptions of 80% LTV and credit scores within the 700–760 range.

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