States With Lowest Mortgage Rates Today – June 3, 2025

Searching for the states with the best mortgage rates today? As of today, June 3, 2025, the states offering the cheapest 30-year mortgage rates for new home purchases are New York, California, Hawaii, and Tennessee. These states boast average rates hovering between 6.86% and 6.97%. Keep reading as I unpack what that means for you, how those rates stack up nationally, and what forces are shaping these numbers.

States With Lowest Mortgage Rates Today – June 3, 2025

It's tempting to jump into the numbers, but before we do that, there's an important note to keep in mind about those tantalizing “teaser” rates you are seeing advertised online. Steer clear of that thinking!

Understanding Mortgage Rate Variations

Mortgage rates are a bit like snowflakes – no two are exactly alike. Why? Several factors influence them:

• Lender Differences: Different lenders have different operational costs, risk tolerances, and business goals, resulting in varying rates. Some lenders might specialize in certain types of loans or cater to specific credit profiles, allowing them to offer more competitive rates in those areas.
• State-Level Factors: States have different economic conditions, regulations, and housing market dynamics. Factors like average credit scores, loan sizes, and foreclosure rates can all affect the rates lenders offer in a particular state.
• Your Financial Profile: Your credit score, income, debt-to-income ratio, and down payment all play a crucial role in determining the interest rate you'll receive. A strong financial profile signals lower risk to the lender, translating into a better rate.

Because of these variations, it's crucial to shop around and compare rates from multiple lenders before making a decision. Don't just settle for the first rate you receive!

States With the Most Affordable Mortgage Rates (June 3, 2025)

Here are the states where you'll find the most appealing 30-year mortgage rates right now, based on averages reported by Investopedia:

• New York: ~6.86%
• California: ~6.90%
• Hawaii: ~6.93%
• Tennessee: ~6.97%
• Georgia, Pennsylvania, and Texas: ~6.97% (These are in a tie with Tennessee)

States With the Highest Mortgage Rates (June 3, 2025)

On the other end of the spectrum, these states currently have the highest 30-year mortgage rates:

• Alaska: ~7.05%
• West Virginia: ~7.10%
• Mississippi: ~7.13%
• Montana: ~7.17%
• Maryland: ~7.20%
• South Dakota and Vermont: ~7.22%

Why the Discrepancies?

You might be wondering what causes such significant variations in rates across different states. Here are a few potential factors:

• Housing Market Conditions: States with robust housing markets and high demand might see slightly higher rates simply because lenders face less competition to attract borrowers.
• Economic Stability: States with stronger economies and lower unemployment rates may be perceived as lower risk by lenders, leading to more favorable rates.
• Lender Presence: The number of lenders operating in a particular state can impact competition and, consequently, rates. More lenders typically mean more competitive rates.

National Mortgage Rate Trends: A Bird's Eye View

To put these state-specific rates into perspective, let's zoom out and look at the national averages. According to Zillow, the average rate for a 30-year fixed-rate mortgage is 7.00%. This is an improvement from the 7.15% mark we saw at the end of May but still above the 6.50% low we saw in March.

Here's a table summarizing the national averages for various types of mortgages, based on data sourced from Zillow:

Loan Type	New Purchase Rate
30-Year Fixed	7.00%
FHA 30-Year Fixed	7.37%
15-Year Fixed	6.04%
Jumbo 30-Year Fixed	7.03%
5/6 ARM	7.03%

Key Takeaways from the National Averages:

• 15-Year Fixed: Offers a significantly lower rate compared to the 30-year fixed, but comes with higher monthly payments.
• FHA Loans: Typically have slightly higher rates than conventional loans, but can be a good option for borrowers with lower credit scores or smaller down payments. FHA loans are government-backed, which means that if you stop making payments, the government will help you pay them back.
• ARMs: Adjustable-rate mortgages (ARMs) start with a fixed rate for a set period, then adjust periodically based on market conditions. While they may offer a lower initial rate, they carry the risk of increased payments if rates rise.

The Big Picture: What's Driving Mortgage Rate Fluctuations?

Understanding why mortgage rates change is just as important as knowing what the current rates are. Here are the main factors at play:

• The Bond Market: Mortgage rates are closely tied to the 10-year Treasury yield. When Treasury yields rise, mortgage rates tend to follow suit, and vice versa.
• The Federal Reserve: The Federal Reserve's monetary policy has a significant impact on mortgage rates. The Fed influences interest rates by buying and selling government bonds.
• Economic Conditions: Factors like inflation, economic growth, and employment rates can all influence mortgage rates. Stronger economic growth often leads to higher rates, while weaker growth can lead to lower rates.
• Inflation: Inflation is like an evil thing for the economy for homeowners. If inflation keeps on rising, then the Federal Reserve will want to raise the funds, which will ultimately affect the mortgage rates for new and existing home buyers.

Looking Ahead to the Rest of 2025

Predicting the future of mortgage rates is always a tricky endeavor. We've already seen that the Fed has opted to hold rates steady for its first few meetings of the year. While the Fed may eventually cut rates later in the year, the timing and magnitude of those cuts remain uncertain.

Right now, I think you should be prepared for modest fluctuation in rates. It's unlikely we'll see a dramatic drop back to the lows of 2021 anytime soon.

Shopping Smart: Tips for Securing the Best Mortgage Rate

Regardless of the overall rate environment, there are steps you can take to increase your chances of securing the most favorable mortgage rate:

• Improve Your Credit Score: A higher credit score demonstrates to lenders that you're a responsible borrower and significantly increases your odds of qualifying for a lower rate.
• Save for a Larger Down Payment: A larger down payment reduces the lender's risk and can result in a better rate. Also, putting more than 20% down payments usually means you may not have to buy private insurance (PMI).
• Shop Around and Compare Rates: As I emphasized earlier, comparing rates from multiple lenders is crucial. Get quotes from banks, credit unions, and mortgage brokers.
• Consider Different Loan Types: Explore whether a 15-year fixed-rate mortgage, FHA loan, or ARM might be a better fit for your financial situation.
• Negotiate Fees: Don't be afraid to negotiate lender fees, such as origination fees and application fees.

Final Thoughts

Navigating the mortgage market can feel overwhelming however, but doing your research will ultimately pay off and help you get the lowest mortgage rates in New York, California, Hawaii, and Tennessee – June 3, 2025.