The average rate for a 30-year fixed-rate purchase mortgage was 3.482% on Tuesday. The average rate for a 30-year refinance was 4.35%.
Money's current mortgage rates include data from over 8,000 lenders across the United States and are updated daily. These rates include discount points and represent what a borrower with a 20% down payment and 700 credit scores — roughly the national average FICO score — would have been quoted.
|30-year fixed-rate purchase mortgage|
|Rate of October 20, 2020|
Mortgage rates vary from state to state. On Tuesday, borrowers in Washington, D.C. were quoted the lowest mortgage rates — at 3.308%. People looking for mortgages in Nevada saw the highest average rate at 3.7%. Nationwide, borrowers with the highest credit scores, 740 and above, were quoted rates averaging 3.046%, while those with credit of 640 or below were shown rates of 4.799% — a 1.753 percentage-point spread.
You may be able to negotiate a lower rate if you shop around or if you have other accounts with the lender. (Money's picks for the best mortgage lenders are here.) Currently, some banks are hiking up advertised rates to keep demand in check, so you may be offered a lower rate if you reach out directly.
Freddie Mac's widely quoted Primary Mortgage Market Survey put rates at 2.81% with 0.6 points paid for the week ending October 15, a new record low. The mortgage purchaser's weekly survey reflects borrowers who put 20% down on conforming loans and have excellent credit.
Refinance rates today
Money's survey also shows that the offered rate for a 30-year refinance for someone with a 740 credit score was 3.706% on Tuesday. Last October, the average mortgage rate (including fees) was 3.859%.
|30-year fixed-rate mortgage refi|
|Rate of October 20, 2020|
A homeowner with a $200,000 mortgage balance currently paying 3.859% on a 30-year could potentially cut their monthly payment from $939 to $921 by financing at the current lower rates. To determine if it's worth it to refinance your mortgage, also consider the closing fees you paid on your current mortgage, how much your new lender is charging and how long you have left on your loan term. (Our picks for the best lenders for refinancing are here).
What else is happening in the housing market right now?
According to the U.S. Census Bureau, overall housing production was up 1.9% month-over-month in September to a seasonally adjusted annual rate of 1.42 million housing starts. Single-family starts were at an annual rate of 1,108,000 units, up 8.5% from August and 11.1% from a year earlier. This represents the highest pace of single-family starts since 2007.
"The housing market remains a bright spot in the U.S. economy, and this is reflected in today's positive housing starts reports," said Chuck Fowke, chairman of the National Association of Home Builders. "Builder confidence is at an all-time high as buyer traffic is strong — another sign that housing is helping to lift the economy."
Building permits were also up, increasing 8.1% year-over-year to an annually adjusted rate of 1,553,000. Housing completions were at a seasonally adjusted annual rate of 1,413,000 units. The latter is an increase of 15.3% over August numbers and a healthy 25.8% above September 2019. The increased production is a good omen for a housing market that has seen an ever-shrinking supply of homes since the pandemic began.
Meanwhile, the total volume of mortgage loans applications ticked down 0.6% for the week ending October 16, according to the Mortgage Bankers Association. Applications for purchase loans were down 2% week-over-week, though still 26% higher than a year ago. Refinance loans, which have consistently made up the highest percentage of mortgage loan applications, ticked up 0.2% from last week and were 74% higher year-over-year. Refi loans made up 66% of all applications.
"Home buying demand remains strong this fall," said Joel Kan, associate vice president of economic and industry forecasting for the MBA. "Given the ongoing housing market recovery and low rate environment, both purchase and refinance applications remained robust compared to a year ago."
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To learn more about the housing market and bidding wars, read: Savvy Homebuyers Are Using an Under-the-Radar Strategy to Win Bidding Wars in 2020.
Rates are subject to change. All information provided here is accurate as of the publish date.