Current Mortgage Rates Across States - May 15, 2025
Tired of getting lost in a sea of mortgage rates? Let's simplify it for you! Here's a rundown of the states boasting the cheapest and most expensive new purchase mortgage rates, updated on Wednesday.
On a budget? Look no further than New York, California, Florida, Pennsylvania, Tennessee, and Texas. These states are currently leading the pack with average rates ranging from 6.89% to 7.05%. Remember, a lower rate means lower costs for you in the long run.
But if you're searching for a more expensive mortgage, brace yourself as you dive into the cold waters of Alaska, West Virginia, Maryland, and Washington D.C. These states' averages range from 7.12% to 7.22%.
Why the big difference? It all comes down to local economies, credit scores, average loan sizes, and regulations. Different lenders operate in various regions, and factors like these can significantly influence the rates they offer.
To get your dream home, it's essential to shop around for the best mortgage option. Don't settle for the first deal you stumble upon. Regularly compare rates to ensure you're getting the best bang for your buck, no matter the type of home loan you're after.
Important Note
The rates we publish aren't the same as the teaser rates you see flashing across the internet. Teaser rates are carefully handpicked to attract attention over average rates. These rates might involve paying points in advance or be based on ideal borrower circumstances, such as an ultra-high credit score or smaller-than-usual loans. Your personal rate will depend on factors such as your credit score, income, and more, so it could vary from the averages mentioned in this article.
National Mortgage Rate Averages
For five consecutive days, 30-year new purchase mortgages have climbed an additional 16 basis points, bringing the average to 7.07%. We witnessed a surge in April when rates escalated 44 basis points within a week, reaching an average of 7.14%—the most expensive level since May 2024.
If you're feeling nostalgic, let me take you back to March when 30-year rates plummeted to 6.50%, their lowest average of 2025. Fast forward to September, and those rates plunged to a two-year low of 5.89%.
Meet Your Mortgage Calculator
Ready to explore your mortgage options? Use our user-friendly Mortgage Calculator to figure out your monthly payments based on factors like your home price, down payment, loan term, property taxes, homeowners insurance, and interest rate on the loan (which, by the way, varies greatly depending on your credit score).
Factors Affecting Mortgage Rates: A Closer Look
Federal Reserve's Monetary Policy
The Federal Reserve's monetary policy holds tremendous sway over mortgage rates. When the Fed lowers the federal funds rate, banks' borrowing costs decrease, potentially resulting in lower mortgage rates. Contrarily, an increase in the federal funds rate typically corresponds to higher mortgage rates as banks need to boost their lending rates to maintain profitability.
Bond Market Activity
Mortgage rates closely follow the trends in the bond market, particularly the 10-year Treasury yield. When bond yields rise, mortgage rates often follow suit since investors ask for higher returns to compensate for the reduced value of existing bonds on the market. In contrast, when bond yields drop, mortgage rates may decrease because investors are content with lower returns.
Competition Among Mortgage Lenders
Competition between mortgage lenders can significantly influence rates offered. In high-demand situations, lenders may hike interest rates to limit their risk exposure and maximize profits. However, during periods of reduced demand, they might cut rates to attract more customers. The competitive landscape between lenders can result in diverse rates across institutions, with some offering more attractive rates to stay competitive.
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Several essential factors, such as the Federal Reserve's monetary policy, the bond market, and competition between mortgage lenders, play significant roles in determining mortgage rates. Here's a deep dive into each of these factors:
Federal Reserve's Monetary Policy
The Federal Reserve's monetary policy exerts considerable influence on mortgage rates. The Fed sets the federal funds rate, which dictates the cost of interbank borrowing. Lower federal funds rates can lead to reduced mortgage rates as banks face lower borrowing costs. Conversely, higher federal funds rates result in increased mortgage rates since banks require higher lending rates to maintain profit margins. In addition, the Fed's actions related to buying and selling government-backed securities and bonds can impact long-term interest rates, including mortgage rates. When the Fed increases its holdings of securities, it pumps more money into the economy, potentially leading to lower long-term interest rates. Selling securities may have the opposite effect, pushing interest rates up.
Bond Market Activity
The bond market plays a significant role in determining mortgage rates, particularly through the 10-year Treasury yield. Mortgage lenders often peg their fixed-rate mortgages to bond rates due to the close association between mortgage-backed securities and Treasury yields. When bond yields rise, mortgage rates tend to increase, as investors seek higher returns to compensate for the lower value of existing bonds on the market. Conversely, when bond yields fall, mortgage rates may drop because investors are content with lower returns.
Competition Among Mortgage Lenders
Competition between mortgage lenders also impacts rates offered. In scenarios with high demand for mortgages, lenders might boost interest rates to manage risk and optimize profits. In contrast, with reduced demand, lenders could decrease rates to capture more business. The competitive landscape between lenders can result in varying rates across institutions, with some offering more attractive rates to stay competitive.
Financial institutions, such as banks versus credit unions, can also affect mortgage rates. Credit unions, for example, might offer lower rates due to their not-for-profit nature and financial stability, allowing them to reinvest profits within the community.
Other Factors
In addition to these main factors, other critical elements, such as inflation, housing supply and demand, and employment rates, also influence mortgage rates. High inflation can lead to increased mortgage rates as lenders seek to maintain purchasing power. Conversely, strong employment and housing demand can cause rates to rise due to heightened demand for mortgages.
- As you delve deeper into mortgage investments, it's crucial to understand the impact of factors like token sales (ICOs) and personal finance on the overall market.
- In the realm of real-estate financing, the regulation of trading activities can significantly influence mortgage rates.
- While comparing mortgage rates, remember that investing in various financial instruments such as tokens (like Initial Coin Offerings, or ICOs) can potentially offer higher returns, but they also come with inherent risks and volatility.
- To make an informed decision about your mortgage, consider the broader financial landscape, including the influence of the Federal Reserve's monetary policy, bond market activity, and competition among lenders, in addition to your personal finances and real-estate investing strategies.
