Lowest Mortgage Rates in Two States Announced on May 2, 2025
Hey there! Let's dive into the latest mortgage rates across the USA, shall we? This week, the most affordable 30-year new purchase mortgage rates were found in New York and Washington. Following closely, the lowest rates were available in Tennessee, Texas, California, Florida, Michigan, North Carolina, and Pennsylvania. These states registered averages between 6.68% and 6.85%.
On the flip side, the states with the highest mortgage rates were Alaska, West Virginia, Washington D.C., Maryland, North Dakota, Rhode Island, and New Mexico. The range of averages for these states was 6.94% to 7.04%. Mortgage rates can vary greatly by state due to local market conditions, credit scores, average loan sizes, and regulations, as well as differences among lenders' risk management strategies.
Remember, shopping around and comparing rates from multiple lenders is key to landing your best mortgage deal, regardless of the type of home loan you're after. The rates we present won't exactly match the seductive, advertised teaser rates you may see online. Those rates are often cherry-picked based on perfect credit scores, small loan sizes, or fees included in the fine print. Your actual rate will depend on factors like your income, credit score, and loan details.
As of May 5, 2025, the national average for 30-year new purchase mortgages has settled down after a rollercoaster April. Currently, the average sits at 6.88%. With our handy Mortgage Calculator, you can examine different loan scenarios and calculate your potential monthly payments based on factors like your home price, down payment, loan term, property taxes, and homeowners insurance.
So, what sends mortgage rates soaring or plummeting? Simply put, it's a complex dance of macroeconomic and industry factors. The bond market, the Federal Reserve's monetary policy, and competition among lenders and loan types all play a part in mortgage rates' fluctuations. Factors like the Federal Reserve's bond-buying policy, the federal funds rate, the Fed's monetary policy, economic growth, and inflation all contribute to the ebb and flow of mortgage rates.
Fun Fact: During 2021, the Federal Reserve's bond-buying policy kept mortgage rates relatively low. However, in November 2021, the Fed began to taper their bond purchases, leading to a series of interest rate hikes aimed at controlling inflation. These rate increases had a notable impact on mortgage rates over the last two years.
Lastly, when we deliver the national and state averages, we employ the Zillow Mortgage API, assuming an 80% loan-to-value ratio and an applicant credit score between 680 and 739. The resulting rates reflect what borrowers can expect when receiving quotes from lenders, though your personal qualifications may vary. Happy house hunting!
[1] Explaining the Variety in State-Level Mortgage Rates[2] Mortgage Rates and the 10-Year Treasury Yield[3] Mortgage Rates and the Federal Funds Rate[4] What influences mortgage rates[5] Inflation and Mortgage Rates
- In personal-finance discussions focusing on mortgage rates, understanding the impact of regulations and local market conditions is crucial, as they significantly influence the cost of mortgages in various states.
- For instance, states like Rhode Island are known for higher mortgage rates compared to states like New York and Washington, affecting the real-estate market on a personal and national level.
- When shopping for mortgages and comparing rates, it's essential to consider not just the advertised online rates, but also factors like credit score, loan details, and the ratio of the mortgage to the property's value to ensure the most competitive deal.
- The mortgage market remains dynamic, with fluctuation partly due to changes in the benchmark 10-year Treasury yield, the Federal Reserve's monetary policy, and the competition between lenders offering different loan types.
- During certain periods, such as the Fed's bond-buying policy in 2021, inflation, and economic growth, the mortgage market tends to exhibit lower rates. Yet, shifts in these factors and the subsequent adjustments in monetary policy can lead to mortgage rates spiking, as seen over the past two years.
