States With Lowest Mortgage Rates Today – May, 22 2025

Looking for the best mortgage rates? As of today, May 22, 2025, the states with the lowest 30-year mortgage rates are New York, California, Florida, North Carolina, Pennsylvania, Texas, and Kentucky. These states currently offer rates ranging from 6.88% to 7.09%. Let's dive deeper into what's driving these rates and how you can snag the best deal for yourself.

States With Lowest Mortgage Rates Today – May, 22 2025

Why Mortgage Rates Vary by State

One of the first things I noticed when I started really paying attention to mortgages is how wildly rates can differ even within the same country. It's not just about national averages; your location plays a huge role. Here's a breakdown of why:

• Regional Lenders: Not all lenders operate everywhere. Some specialize in specific regions, leading to different levels of competition and, therefore, different rates.
• Credit Score Variations: Average credit scores can vary from state to state. States with higher average credit scores might see slightly better rates overall.
• Average Loan Size: The size of the average mortgage loan can also impact rates. Larger loan amounts sometimes come with different risk profiles for lenders.
• State Regulations: Each state has its own set of regulations governing the mortgage industry. These rules can affect lender costs and, subsequently, the rates they offer.
• Risk Management: Lenders have different ways of assessing and managing risk. Some might be more aggressive in certain markets than others.

Today's Rate Landscape: A Closer Look

Zillow's data gives us a snapshot of where things stand on May 22, 2025. Let's break it down:

• The Cheapest States: As mentioned, New York, California, Florida, North Carolina, Pennsylvania, Texas, and Kentucky are leading the way with the lowest 30-year mortgage rates. This could be due to a combination of factors like strong competition among lenders, favorable state regulations, or a relatively healthy housing market.
• The Most Expensive States: On the other end of the spectrum, Alaska, Iowa, New Mexico, Washington, D.C., North Dakota, and Vermont have the highest rates, ranging from 7.17% to 7.23%. This might be because these states have fewer lenders, different risk profiles, or a combination of other factors.
• National Average: The national average for a 30-year fixed-rate mortgage is currently at 7.11%, showing a slight increase due to bond market activity influenced by President Trump's proposed tax bill.

Key Mortgage Rates in May 2025:

Loan Type	Rate
30-Year Fixed	7.11%
FHA 30-Year Fixed	7.37%
15-Year Fixed	6.11%
Jumbo 30-Year Fixed	7.10%
5/6 ARM	7.53%

Important Considerations

It's crucial to remember that the rates you see advertised online, often called teaser rates, aren't always what you'll get. These rates are often based on very specific scenarios, like having an excellent credit score or paying points upfront.

• Your Individual Profile Matters: The rate you ultimately secure will depend on your credit score, income, debt-to-income ratio, and the size of your down payment.
• Shop Around: The best way to find the lowest rate is to compare offers from multiple lenders. Don't just settle for the first rate you see.
• Understand Points: Paying points (fees paid upfront) can lower your interest rate, but you need to calculate whether the upfront cost is worth the long-term savings.
• Factor in All Costs: Remember to consider other costs associated with buying a home, such as property taxes, homeowners insurance, and closing costs.

Why Did Mortgage Rates Jump?

The article mentions a jump in rates driven by a bond market surge in response to President Trump's proposed tax bill. Here's the connection:

• Bond Market Influence: Mortgage rates are closely tied to the bond market, particularly the 10-year Treasury yield. When bond yields rise, mortgage rates tend to follow suit.
• Tax Bill Impact: The proposed tax bill likely influenced investor expectations about future economic growth and inflation, which, in turn, affected bond yields.
• Market Volatility: Economic news and policy changes can create volatility in the bond market, leading to fluctuations in mortgage rates.

The Federal Reserve's Role

The Federal Reserve (the Fed) plays a significant role in influencing mortgage rates, although indirectly. Here's how:

• Bond Buying: In the past, the Fed has used bond-buying programs to lower interest rates and stimulate the economy. When the Fed buys bonds, it increases demand, driving prices up and yields (interest rates) down.
• Federal Funds Rate: The Fed also sets the federal funds rate, which is the target rate that banks charge each other for overnight lending. While the federal funds rate doesn't directly control mortgage rates, it can influence them.
• Inflation Control: The Fed's primary goal is to maintain price stability (control inflation). When inflation is high, the Fed may raise interest rates to cool down the economy, which can also push mortgage rates higher.
• Recent Rate Holds: The Fed has held rates steady for the third meeting of the new year, suggesting a cautious approach to future rate cuts. This could mean that mortgage rates may remain relatively stable in the short term.

How to Get the Best Mortgage Rate

• Improve Your Credit Score: A higher credit score demonstrates to lenders that you are a reliable borrower and you'll likely be offered a better rate.
• Save for a Larger Down Payment: A larger down payment reduces the amount you need to borrow, which can lower your interest rate and reduce your monthly payments.
• Shop Around: Don't just settle for the first rate you're offered. Compare rates from multiple lenders to find the best deal.
• Consider Different Loan Types: Explore different loan types, such as fixed-rate mortgages, adjustable-rate mortgages, and FHA loans, to see which one best fits your needs and financial situation.
• Work With a Mortgage Broker: A mortgage broker can help you navigate the complex mortgage market and find the best rates and terms available to you.

My Personal Take

I've always believed that knowledge is power, especially when it comes to big financial decisions like buying a home. Understanding the factors that influence mortgage rates and taking the time to shop around can save you thousands of dollars over the life of your loan. Don't be afraid to ask questions and negotiate with lenders to get the best possible deal.

Conclusion

While national trends provide a general overview, remember that mortgage rates vary significantly by state. As of May 22, 2025, New York, California, Florida, North Carolina, Pennsylvania, Texas, and Kentucky are offering some of the most competitive rates. However, your individual circumstances will ultimately determine the rate you qualify for. So, do your research, shop around, and don't be afraid to negotiate! Happy house hunting!