October 17, 2022: Mortgage Rates Drop to $7.25% for 30-Year Loans – Latest Trends & Insights
On October 17, 2022, 30-year mortgage rates fell sharply from recent 20-year highs, offering borrowers relief after a period of significant increases. Discover today’s updated mortgage rate trends and what factors influence these changes.
Following a record-setting peak, 30-year mortgage rates experienced a notable decline on Friday, retreating from the highest levels seen in two decades.
After soaring to a 20-year high of 7.55% on Thursday, the average rate for a 30-year fixed mortgage fell by nearly 0.3 percentage points, settling at 7.25% by the end of the week. This marks a significant pullback from the recent spikes, including two peaks at 7.42% in the past three weeks.
Current National Mortgage Rate Averages
Alongside the 30-year fixed rate drop, 15-year mortgage rates also declined, albeit more modestly, by 10 basis points to an average of 6.77%. This is slightly below the recent 14-year peak of 6.89%. Jumbo 30-year loans followed suit, decreasing 13 basis points to 6.02%, down from a 2010 high of 6.15% recorded just the day before.
Refinancing rates mirrored these downward trends, with the 30-year refinance average dropping by about a third of a percentage point, while 15-year and Jumbo 30-year refinance rates fell by roughly an eighth of a point. Notably, refinancing costs remain approximately 57 basis points higher than new purchase rates for fixed-rate loans.
After a steep increase in mortgage rates during the first half of 2022, including a mid-June peak nearly 3.5 percentage points above the August 2021 low of 2.89%, September’s surge pushed rates even higher. The 30-year average climbed 1.27 percentage points in just 16 days, surpassing June’s peak by over one percentage point.
Important Considerations
Displayed mortgage rates reflect national averages based on typical borrower profiles and loan assumptions. They are not directly comparable to promotional or 'teaser' rates advertised online, which often require upfront points or apply to borrowers with exceptional credit scores or smaller loan amounts relative to home value.
Use our Mortgage Calculator to estimate monthly payments for various loan scenarios tailored to your financial situation.
What Influences Mortgage Rate Fluctuations?
Mortgage rates fluctuate due to a complex mix of macroeconomic factors and industry dynamics. Key influences include movements in the bond market—especially 10-year Treasury yields—the Federal Reserve’s monetary policies regarding government-backed mortgage funding, and lender competition across different loan products.
Throughout much of 2022, the Federal Reserve’s bond-buying programs in response to pandemic-related economic challenges have helped keep mortgage rates relatively moderated. However, since June, the Fed has been actively reducing its balance sheet and tapering bond purchases, accelerating these reductions in September. These actions significantly impact mortgage rate movements.
The Federal Open Market Committee (FOMC), which sets key monetary policies, meets approximately every six to eight weeks, with the next session scheduled for November 1-2, 2022. Their decisions can heavily influence future mortgage rate trends.
Methodology
The mortgage rates presented are national averages calculated from offers by over 200 top lenders across the United States. These averages assume an 80% loan-to-value (LTV) ratio and a borrower credit score between 700 and 760. Actual rates may vary based on individual borrower qualifications and market conditions.
Our state-by-state mortgage rate map similarly reflects the lowest current rates offered by lenders within each state under the same assumptions.
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