Today's lowest mortgage rates are found in these two states - as of May 2, 2025.
Swinging mortgage rates across the Land of the Free are an intricate dance between national economic forces and local conditions, not to mention individual borrower characteristics. Here's what's shaping things:
National and Market Factors
- Treasury Yield Jive: Mortgage rates often hold a mirror to the 10-year U.S. Treasury bond yield, acting as a popular benchmark for lenders. As Treasury yields rise, mortgage rates typically follow, while they generally fall when yields decrease[1][5].
- Fed Monetary Policy Shimmy: The Federal Reserve's dance moves indirectly influence mortgage rates through their policies, such as the federal funds rate and quantitative easing programs. Although mortgage rates don’t always move in sync with the Fed's benchmark rate, market expectations of Fed actions shape investor behavior[4][5].
- Inflation Samba: High inflation often sparks the Fed to bump up interest rates to chill the economy, causing mortgage rates to heat up. On the flip side, if inflation cools or economic growth is foreseen to slow, mortgage rates may salsa their way lower[5].
- Foreign Demand for Chang: Foreign demand for U.S. Treasurys plays a role in setting yields and mortgage rates. A robust appetite for Treasurys can keep yields – and thus mortgage rates – low[1][2].
Regional and State-Level Moves
- State-Specific Rate Rhythms: Mortgage rates like to ricochet off local housing markets, state regulations, lender competition, and business costs. Places with fierce lender competition might offer slightly lower rates, while those with greater risk or limited competition could see higher rates[3][5].
- Property Type and Intention: The type of property bought also affects rates. Primary residences traditionally boast lower rates compared to second homes or investment properties, possibly skewing state-level averages based on local buyer trends[5].
Borrower-Key Factors
- Creditworthiness Polka: A borrower's credit score, debt-to-income ratio, and down payment size impact the rate offered. Higher risk borrowers are danced with higher rates, affecting state-level averages if credit profiles vary geographically[5].
The interplay of these factors results in an ever-changing, regionally inconsistent waltz of 30-year new purchase mortgage rates[1][3][5]. It's always smart to shop around and compare rates, regardless of what type of home loan you seek. And remember, the published rates we share don't directly match those flashy teaser rates you see online, so be ready for some variation when you qualify for a loan based on your credit score, income, and other factors.
- In the context of personal-finance, the 30-year new purchase mortgage rates may be influenced by regulation, as state-specific rules can impact lender competition and, subsequently, mortgage rates at a regional level.
- Within the realm of investing, the demand for tokenized securities, known as Initial Coin Offerings (ICOs), could eventually reshape the finance industry and potentially impact real-estate investing, altering the dynamics of mortgage rates and borrowing costs.
- A borrower's creditworthiness, as determined by credit score, debt-to-income ratio, and down payment size, can significantly affect the interest rates offered while securing a mortgage, demonstrating the importance of maintaining personal-finance health for better access to favorable mortgage rates.
