Having climbed for nearly two weeks already, 30-year mortgage rates surged higher Thursday—triggered by Wednesday’s Federal Reserve announcement of a scaled-back forecast for 2025 rate cuts. The 30-year average mortgage rate has jumped to 6,98%. This is the highest level it’s been in over five months. The rate movement of other types of mortgages was mixed.
| National Averages of Lenders' Best Mortgage Rates | |
|---|---|
| Loan Type | New Purchase |
| 30 Year Fixed | 6.98% |
| FHA 30 Year Fixed | 6.28% |
| Fixed 15 Year Term | 6.12% |
| Jumbo 30-Year Fixed | 6.90% |
| 5/6 ARM | 7.42% |
| Zillow Mortgage API is available. | |
Shopping around and comparing rates is a good idea, regardless of the type or amount of loan that you want.
Compare Mortgage Rates Today, Dec. 20, 2020
Today's New Purchase Mortgage Rate Averages
On Wednesday's news that the Fed is expecting to make fewer rate cuts in 2024 than previously projected, 30-year mortgage rates shot up a sizable 13 basis points Thursday. That pushes the average to 6.98%—its highest reading since July 3. Rates had sunk to a two-year low of 5.89% back in September, but they've soared almost 1.1 percentage points higher over the past three months.
If you look further back in time, the 30-year mortgage rate is still well below its April high of 7.37%. And they're more than a percentage point cheaper than the historic 23-year peak of 8.01% reached in October 2023.
The average rate for 15-year mortgages increased by 11 basis points on Thursday. This is the most recent reading of the month. In September, rates on 15-year mortgages fell to their lowest level in two years, falling as low as 4.97%. Though today's 15-year average is elevated, it remains almost a percentage point below last fall's historic 7.08% reading—a high since 2000.
The average rate for jumbo 30-year mortgages increased by a lesser 7 basis points on Thursday, to 6.90%. In September, the average rate for jumbo 30-year mortgages had fallen to 6.24%. It was their lowest level in over 19 months. Although daily historical jumbo rates weren't published before 2009, it's estimated that the 8.14% peak we saw in October 2023 was the most expensive jumbo 30-year average in 20-plus years.
| National Averages of Lenders' Best Rates – New Purchase | ||
|---|---|---|
| Type of Loan | Buy New Rates | Everyday Change |
| 30 Year Fixed | 6.98% | +0.13 |
| FHA 30 Year Fixed | 6.28% | No Change |
| VA Fixed 30-Year | 6.44% | +0.15 |
| The 20-Year Fixed Rate | 6.93% | +0.16 |
| 15-Year Fixed | 6.12% | +0.11 |
| FHA Fixed 15-Year Rate | 6.40% | No Change |
| Ten-Year Fixed | 6.18% | +0.26 |
| 7/6 ARM | 7.37% | +0.06 |
| 5/6 ARM | 7.42% | +0.01 |
| Jumbo 30-Year Fixed | 6.90% | +0.07 |
| Jumbo 15-Year Fixed | 6.66% | -0.04 |
| Jumbo 7/6 ARM | 7.06% | -0.02 |
| Jumbo 5/6 ARM | 7.19% | +0.02 |
| Zillow Mortgage API is available. | ||
The Weekly Freddie Mac Average
Freddie Mac is a government sponsored buyer of mortgages. Every Thursday they publish a weekly mortgage average. This week's reading jumped 12 basis points to a weekly average of 6.72%. In fact, the weekly average dropped as low as 6.0% as recently as last September. Back in October 2023, however, Freddie Mac's average saw a historic rise, surging to a 23-year peak of 7.79%.
Freddie Mac average is different from ours for the 30-year rate because Freddie Mac creates a five-day average based on a blend of past rates. Investopedia 30 year averages are daily and provide a much more accurate indication of changes in rates. In addition, the criteria for included loans (e.g., amount of down payment, credit score, inclusion of discount points) varies between Freddie Mac's methodology and our own.
Calculate your monthly mortgage payments using the Mortgage Calculator.
The rates we publish won’t compare directly with teaser rates you see advertised online since those rates are cherry-picked as the most attractive vs. the averages you see here. Teaser rates may involve paying points in advance or may be based on a hypothetical borrower with an ultra-high credit score or for a smaller-than-typical loan. Rates will vary depending on factors such as your credit score and income.
What causes mortgage rates to rise or fall?
Rates of mortgages are determined by macroeconomic and industrial factors such as
- Bond market direction and level, including 10-year Treasury yields
- Federal Reserve’s current policy on monetary affairs, including bond purchasing and government-backed loans.
- Mortgage lenders compete with each other for different loan types.
Because any number of these can cause fluctuations simultaneously, it's generally difficult to attribute the change to any one factor.
The mortgage market remained relatively flat for most of the year 2021 due to macroeconomic conditions. Federal Reserve purchased billions of dollar bonds as a response to pandemic-induced economic pressures. Mortgage rates are heavily influenced by this bond-buying strategy.
Starting in November 20, the Fed started to reduce its monthly bond purchases, reducing them by a significant amount each month.
Fed increased federal funds rates aggressively from July 20, 2023 onwards to battle inflation. Although the Fed Funds Rate can affect mortgage rates indirectly, it does so indirectly. Mortgage rates and the Fed funds rate may even move in opposite directions.
But given the historic speed and magnitude of the Fed's 2022 and 2023 rate increases—raising the benchmark rate 5.25 percentage points over 16 months—even the indirect influence of the fed funds rate has resulted in a dramatic upward impact on mortgage rates over the last two years.
Fed held the Federal Funds Rate at its highest level, starting July 2023. The central bank cut the rate by 0.50 percentage point on September 18, and followed it up with a quarter-point drop on November 7 and December 18
However, the Fed's policy committee cautioned at its meeting this week that, due to stubborn inflation, further rate cuts may be fewer and farther between. In response to this revised 2025 forecast, 10-year Treasury rates have risen. This has in turn triggered an increase in mortgage interest rates.
The Mortgage Rate Tracker
The national and state averages cited above are provided as is via the Zillow Mortgage API, assuming a loan-to-value (LTV) ratio of 80% (i.e., a down payment of at least 20%) and an applicant credit score in the 680–739 range. Rates are based upon the qualifications of the borrower and may be different from those advertised in teaser offers. © Zillow, Inc., 2024. The Zillow terms of use apply.
Article sources Investopedia asks writers to cite primary sources when writing their articles. White papers, data from the government, interviews with experts, and original reporting are all examples. Where appropriate, we also refer to original research by other respected publishers. Learn more about how we produce accurate and impartial content by visiting our The editorial Policy.
Freddie Mac. “Mortgage Rates."
Congressional Research Service. "Federal Reserve: Tapering of Asset Purchases," Page 1.
Department of The Treasury of The United States. "Daily Treasury Par Yield Curve Rates."
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