5 critical action steps every first-time homebuyer must know
arrow
David Bach’s
arrow First-Time Homebuyer Challenge
Get Access Now Learn More

Many companies featured on Money advertise with us. Opinions are our own, but compensation and
in-depth research determine where and how companies may appear. Learn more about how we make money.

Advertiser Disclosure

The purpose of this disclosure is to explain how we make money without charging you for our content.

Our mission is to help people at any stage of life make smart financial decisions through research, reporting, reviews, recommendations, and tools.

Earning your trust is essential to our success, and we believe transparency is critical to creating that trust. To that end, you should know that many or all of the companies featured here are partners who advertise with us.

Our content is free because our partners pay us a referral fee if you click on links or call any of the phone numbers on our site. If you choose to interact with the content on our site, we will likely receive compensation. If you don't, we will not be compensated. Ultimately the choice is yours.

Opinions are our own and our editors and staff writers are instructed to maintain editorial integrity, but compensation along with in-depth research will determine where, how, and in what order they appear on the page.

To find out more about our editorial process and how we make money, click here.

By Leslie Cook
September 28, 2020

Borrowers with 700 credit scores were quoted an average rate of 3.543% to secure a 30-year fixed-rate purchase mortgage on Friday, according to Money’s daily survey of over 8,000 lenders across the United States. At this credit score, roughly the national average, the rate for a 30-year refinance was 4.457%. Our rates include discount points and are for borrowers putting 20% down.

30-year fixed-rate purchase mortgage
3.543%
Rate of September 25, 2020
Find your actual rate at Quicken Loans
Click below to get started and see your rate today
View Rates for October 27, 2020
ADVERTISEMENT

Borrowers in Pennsylvania were quoted the lowest mortgage rates on Friday — at 3.337%. Those in New Mexico saw the highest average rate at 3.826%. Nationwide, borrowers with the highest credit scores, 740 and above, were quoted rates averaging 3.079%, while those with credit of 640 or below were given rates of 4.771% — a 1.692 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 2.90% with 0.8 points paid for the week ending September 24. 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 3.825% on Friday. Last September, the average mortgage rate (including fees) was 3.922%.

30-year fixed-rate mortgage refi
3.825%
Rate of September 25, 2020

A homeowner with a $200,000 mortgage balance currently paying 3.922% on a 30-year loan could potentially cut their monthly payment from $946 to $935 by financing at today’s 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).

Ads by Ad Practitioners
ADVERTISEMENT

What else is happening in the housing market right now?

Historically low mortgage rates have fueled a hot real estate market since COVID-19-related lockdowns started to ease in May. Perhaps not surprisingly, suburban areas are outpacing urban areas in terms of home buyer interest, price growth, and pace of sales.

According to a new report from Realtor.com, suburban home prices rose 3.2% since early March compared to a 2.3% gain for urban homes. The difference is even greater in the top 10 metro areas, where suburban home prices have grown 5.2% since last year compared to a 2.4% growth for urban areas. Traditionally, urban areas have seen higher home price growth as home buyers were looking for properties closer to workplaces and city centers. However, with the emphasis on social distancing and the increased opportunity for many to work from home caused by the spread of the coronavirus, the suburbs have become much more desirable.

“Data shows in our post-COVID world there’s a strong preference towards a suburban lifestyle with its bigger houses, backyards, and quiet streets,” said Danielle Hale, chief economist for Realtor.com. “But American cities are not becoming ghost towns anytime soon; in fact, they are also seeing an uptick of home buyers, it’s just not as strong as the surge we’re seeing in the suburbs.”

Suburban homes are spending less time on the market as well. In May, suburban homes spent 29% more time on the market than last year, while urban homes spent 34% more time. By the end of summer, suburban homes were selling 11% faster than last year while urban homes were selling 8% faster.

As a result of high home buyer demand, the housing inventory continues to shrink. The number of suburban homes currently for sale is down 41% year-over-year, while the number of urban homes for sale is down 34%.

Ads by Ad Practitioners
What are current mortgage rates?
Find your actual rate at Quicken Loans - click your state to get started and see your rate today.
HawaiiAlaskaFloridaSouth CarolinaGeorgiaAlabamaNorth CarolinaTennesseeRIRhode IslandCTConnecticutMAMassachusettsMaineNHNew HampshireVTVermontNew YorkNJNew JerseyDEDelawareMDMarylandWest VirginiaOhioMichiganArizonaNevadaUtahColoradoNew MexicoSouth DakotaIowaIndianaIllinoisMinnesotaWisconsinMissouriLouisianaVirginiaDCWashington DCIdahoCaliforniaNorth DakotaWashingtonOregonMontanaWyomingNebraskaKansasOklahomaPennsylvaniaKentuckyMississippiArkansasTexas
View Rates
ADVERTISEMENT

Mortgage Term of the Week

Balloon Payment: A lump sum due at the of a mortgage term to finish repaying the loan.

Ads by Ad Practitioners
ADVERTISEMENT

Bottom line:

Mortgage Rates Vary From State to State. Here’s How to Get the Best Deal if You’re Moving

The Ultimate Guide to Ditching the City and Moving to the Suburbs

Procrastinators, It’s Not Too Late to Refinance Your Mortgage and Save Thousands

Advertiser Disclosure

The purpose of this disclosure is to explain how we make money without charging you for our content.

Our mission is to help people at any stage of life make smart financial decisions through research, reporting, reviews, recommendations, and tools.

Earning your trust is essential to our success, and we believe transparency is critical to creating that trust. To that end, you should know that many or all of the companies featured here are partners who advertise with us.

Our content is free because our partners pay us a referral fee if you click on links or call any of the phone numbers on our site. If you choose to interact with the content on our site, we will likely receive compensation. If you don't, we will not be compensated. Ultimately the choice is yours.

Opinions are our own and our editors and staff writers are instructed to maintain editorial integrity, but compensation along with in-depth research will determine where, how, and in what order they appear on the page.

To find out more about our editorial process and how we make money, click here.

EDIT POST