Today’s refinancing rates by state – December 18, 2024

On By Littum

The states with the cheapest 30-year mortgage refinance rates on Tuesday were New York, California, Connecticut, Louisiana, Arkansas, Delaware and Mississippi. The seven state recorded 30-year refi averages are between 6.60% and 6.90%.

Meanwhile, the states with the highest refinancing rates on Tuesday were Kentucky, Hawaii, Arizona, Illinois, Indiana, Washington, DC, Alaska and Georgia. The range of 30-year refi averages for these states was 7.02% to 7.09%.

Interest rates for refinancing mortgages vary depending on the state they are from. Different lenders operate in different regions, and rates can be affected by state-level variations in credit scores, average loan sizes and regulations. Lenders also have different risk management strategies that affect the rates they offer.

As prices vary widely across lenders, it’s always smart to research your best mortgage and regularly compare prices, regardless of the type of home loan you’re looking for.

Important

The prices we publish will not be directly compared to teaser prices you see advertised online, as these prices have been chosen as the most attractive compared to the averages you see here. Teaser rates may involve paying points upfront or may be based on a hypothetical borrower with an ultra-high credit score or for a smaller-than-typical loan. The rate you ultimately secure will be based on factors such as your credit score, income and more, so it may vary from the averages you see here.

National mortgage refinancing rate average

The national average for 30-year refinance mortgages fell 1 basis point to 6.95% on Tuesday, but that’s nearly a quarter of a percentage point higher than at the start of last week, when rates fell to an eight-week low of 6.72%. The current average is almost a full percentage point above mid-September, when the average fell to 6.01% – the cheapest level in 19 months.

National average of lenders’ best mortgage rates
Loan type Average refinancing rate
30-year fixed 6.95%
FHA 30-year fixed 6.29%
15-year fixed 5.87%
Jumbo 30-year fixed 6.93%
5/6 ARM 6.99%
Delivered via the Zillow Mortgage API

Calculate monthly payments for different loan scenarios with our mortgage calculator.

What makes mortgage rates rise or fall?

Mortgage interest rates are determined by a complex interplay of macroeconomic and industry factors, such as:

Because any number of these can cause fluctuations simultaneously, it is generally difficult to attribute a change to a single factor.

Macroeconomic factors kept the mortgage market relatively low for most of 2021. In particular, the Federal Reserve had been buying billions of dollars of bonds in response to the economic pressures of the pandemic. This bond buying policy is a major influence on mortgage rates.

But starting in November 2021, the Fed began tapering its bond purchases, making significant monthly reductions until reaching net zero in March 2022.

Between then and July 2023, the Fed aggressively raised the federal funds rate to combat decades of high inflation. While the fed funds rate can affect mortgage rates, it does not do so directly. In fact, the Fed Funds rate and mortgage rates can move in opposite directions.

But given the historic speed and magnitude of the Fed’s rate hikes in 2022 and 2023 — raising the benchmark rate by 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 past two year.

The Fed kept the federal funds rate at its highest level in nearly 14 months, starting in July 2023. But at its latest meeting, the central bank announced the first rate cut in what is expected to be a series of cuts in 2024 and likely 2025. The first reduction was on 0.50 percentage point.

On November 7, the Fed announced a further rate cut of 0.25 percentage points, bringing the federal funds rate to 4.5% to 4.75%. With this cut, the Fed Funds rate reaches its lowest level since March 2023.

The Fed’s next interest rate announcement will be on December 18.

This is how we track interest on mortgage loans

The national and state averages quoted above are provided as-is via the Zillow Mortgage API, assuming a loan-to-value (LTV) ratio of 80% (ie, a down payment of at least 20%) and an applicant’s credit score in the 680 -739 range. The resulting rates represent what borrowers should expect when receiving offers from lenders based on their qualifications, which may vary from advertised teaser rates. © Zillow, Inc., 2024. Use subject to Zillow’s Terms of Use.