Original Article – https://www.investopedia.com/today-s-mortgage-rates-and-trends-december-24-2021-rates-edge-down-5214321

Mortgage rates took a step back Thursday, after three consecutive days of increases started the week. Still, the 30-year fixed-rate average is within a tenth of a percentage point of its highest rate of 2021.https://f3b27b9c835cc633706e7973c1f2e8aa.safeframe.googlesyndication.com/safeframe/1-0-38/html/container.html

National averages of the lowest rates offered by more than 200 of the country’s top lenders, with a loan-to-value ratio (LTV) of 80%, an applicant with a FICO credit score of 700-760, and no mortgage points.https://f3b27b9c835cc633706e7973c1f2e8aa.safeframe.googlesyndication.com/safeframe/1-0-38/html/container.html

Today’s National Mortgage Rate Averages

After climbing nine basis points over the first three days this week, 30-year fixed mortgage rates reversed to dip two points Thursday. At 3.31%, the current average sits eight points below its calendar year high of 3.39%, a level hit just before Thanksgiving.https://f3b27b9c835cc633706e7973c1f2e8aa.safeframe.googlesyndication.com/safeframe/1-0-38/html/container.html

The 15-year and Jumbo 30-year averages similarly shed two basis points Thursday. The 15-year average is currently 2.48%, which is 15 points below its 2.63% YTD high, and the Jumbo 30-year average of 3.26% sits more than two-tenths of a percentage point below its 2021 high of 3.47%.

Compared to early August, however, when a major rate dip took most averages to five-month lows, the 30-year average is currently 42 basis points more expensive, while the 15-year and Jumbo 30-year averages are 27 and 20 points higher, respectively.https://f3b27b9c835cc633706e7973c1f2e8aa.safeframe.googlesyndication.com/safeframe/1-0-38/html/container.html

Refinance rates showed similar declines Wednesday, with the 30-year refinance average also losing two points. Rates to refinance fixed-rate loans are currently 10 to 18 points higher than their new purchase counterparts.

Lowest Mortgage Rates by State

The lowest mortgage rates available vary depending on the state where originations occur. Mortgage rates can be influenced by state-level variations in credit score, average mortgage loan term, and size, as well as individual lenders’ varying risk management strategies.https://datawrapper.dwcdn.net/C2EyQ/26/These rates are surveyed directly from over 200 top lenders.

What Causes Mortgage Rates to Rise or Fall?

Mortgage rates are determined by a complex interaction of macroeconomic and industry factors, such as the level and direction of the bond market, including 10-year Treasury yields; the Federal Reserve’s current monetary policy, especially as it relates to funding government-backed mortgages; and competition between lenders and across loan types. Because fluctuations can be caused by any number of these at once, it’s generally difficult to attribute the change to any one factor.

Macroeconomic factors have kept the mortgage market relatively low for much of this year. In particular, the Federal Reserve has been buying billions of dollars of bonds in response to the pandemic’s economic pressures, and continues to do so. This bond-buying policy (and not the more publicized federal funds rate) is a major influencer on mortgage rates.

On Dec. 15, the Fed announced that, in light of stronger and more persistent inflation pressure than originally expected, it will speed up its timeline for throttling Fed bond buying, reducing the amount they purchase by a larger increment each month than initially planned. This so-called taper began in late November.

The Fed’s rate and policy committee, called the Federal Open Market Committee (FOMC), meets every 6-8 weeks. Their next scheduled meeting will be held Jan. 25-26.

Methodology

The national averages cited above were calculated based on the lowest rate offered by more than 200 of the country’s top lenders, assuming a loan-to-value ratio (LTV) of 80% and an applicant with a FICO credit score in the 700-760 range. The resulting rates are representative of what customers should expect to see when receiving actual quotes from lenders based on their qualifications, which may vary from advertised teaser rates.