States With the Lowest Mortgage Rates Today – May, 12 2025

Finding the most affordable path to homeownership is a top priority for many. As of today, May 12, 2025, the states offering the lowest 30-year new purchase mortgage rates are New York, Pennsylvania, Tennessee, Oregon, California, and Florida, with average rates hovering between 6.78% and 6.96%, according to Zillow's data. It's interesting to see this mix of states, from the Northeast to the Southeast and the West Coast, all offering relatively attractive rates right now.

On the flip side, those looking to buy in Alaska, West Virginia, North Dakota, Maine, Montana, New Hampshire, South Dakota, and Wyoming are facing the highest average mortgage rates, ranging from 7.04% to 7.17%. This disparity highlights a crucial point: the journey to securing a mortgage isn't a one-size-fits-all experience, and where you live can significantly impact the interest rate you'll likely pay.

States With the Lowest Mortgage Rates Today – May 12, 2025

Why Does Your State Matter for Mortgage Rates?

You might be wondering why mortgage rates aren't uniform across the entire country. Well, several factors come into play, many of which are specific to individual states. For starters, the lenders operating in a particular region can influence rates. Different companies have different risk appetites and operational costs, which can translate to varying interest rates.

Beyond that, state-level variations in credit scores, the average size of home loans, and even state regulations can all have an impact. Think about it – a state with a generally higher average credit score might be seen as a lower-risk lending environment, potentially leading to slightly better rates overall. Similarly, the types of properties being bought and the typical loan amounts could influence the rates offered.

I've also noticed that lenders' own risk management strategies play a role. They're constantly assessing the economic climate and local market conditions, and this assessment feeds into the rates they deem appropriate. It's a bit like a balancing act – they want to attract borrowers while also protecting themselves against potential defaults.

The National Picture: A Bit of a Seesaw

Looking at the broader national trends, the average rate for a 30-year new purchase mortgage currently stands at 6.98%. We've seen some movement recently, with rates dropping for a couple of days before inching up again. Interestingly, we saw a peak in mid-April, reaching 7.14%, which was the highest since May of the previous year.

However, March offered a bit of relief, with rates dipping to 6.50%, the lowest average we've seen so far in 2025. And if we look back a bit further, September of last year saw a notable low of 5.89%. This back-and-forth really underscores how dynamic the mortgage market can be.

Here's a quick look at the national averages for different loan types as of today (Zillow):

• 30-Year Fixed: 6.98%
• FHA 30-Year Fixed: 7.37%
• 15-Year Fixed: 6.03%
• Jumbo 30-Year Fixed: 6.96%
• 5/6 ARM: 7.31%

It's worth noting that these are just national averages. The actual rate you'll qualify for will depend heavily on your individual financial situation, including your credit score, income, and the size of your down payment.

My Take: Why Shopping Around is Non-Negotiable

Based on what I'm seeing, one piece of advice rings louder than ever: always, always shop around for your mortgage. Whether you're in a state with some of the lowest rates or one of the highest, the rates offered by different lenders can vary significantly. Don't just settle for the first offer you receive. Take the time to compare rates and terms from multiple lenders. It might seem like extra work, but it could save you thousands of dollars over the life of your loan.

Also, be wary of those super low “teaser rates” you might see advertised online. Often, these come with strings attached, like having to pay points upfront or requiring an exceptionally high credit score that most people don't have. The rates you actually qualify for will be based on your unique circumstances.

Understanding the Forces Behind Rate Fluctuations

The reasons why mortgage rates rise and fall are complex and involve a dance of various economic factors. Here are some of the key players:

• The Bond Market: Keep a close eye on the 10-year Treasury yield. It's a big influencer on mortgage rates. When Treasury yields go up, mortgage rates often follow suit, and vice versa.
• The Federal Reserve (The Fed): The Fed's monetary policy, particularly its actions related to buying bonds and managing interest rates, can have a ripple effect on mortgage rates. For example, when the Fed was buying a lot of bonds during the pandemic, it helped keep mortgage rates relatively low. However, when they started to reduce these purchases, we saw rates begin to climb.
• Competition Among Lenders: The level of competition in the mortgage market itself can also play a role. When lenders are vying for borrowers, they might offer slightly more competitive rates.
• Overall Economic Health: Factors like inflation, unemployment, and economic growth can influence investor confidence and, consequently, mortgage rates.

Trying to pinpoint the exact cause of a rate change is often tricky because many of these factors are moving simultaneously. For instance, the Fed aggressively raised the federal funds rate to combat inflation a while back. While the federal funds rate doesn't directly dictate mortgage rates, its rapid increase definitely contributed to the significant rise in mortgage rates we've witnessed.

Looking ahead, the Fed has held rates steady for a bit, and there's a chance we might see more of that throughout the rest of 2025. With several rate-setting meetings still on the calendar, it's something I'll be watching closely.

In Conclusion: Stay Informed and Shop Smart

Navigating the world of mortgage rates can feel overwhelming, but understanding the factors at play and knowing where to find potentially lower rates is a great first step. While New York, Pennsylvania, Tennessee, Oregon, California, and Florida are currently showing the lowest averages, remember that your individual rate will depend on your specific financial profile. My best advice is to stay informed about market trends and, most importantly, shop around diligently to find the best mortgage option for your needs.