Looking for the states with the lowest mortgage rates today? On May 19, 2025, the states boasting the cheapest 30-year new purchase mortgage rates are New York, California, Florida, Colorado, Tennessee, Texas, Georgia, North Carolina, and Washington. These states showcase average rates ranging from 6.81% to 6.99%. Let's dive into why rates vary so much and what it means for you.
States With Lowest Mortgage Rates Today – May 19, 2025
Why Do Mortgage Rates Vary By State?
It's a question I get asked a lot: “Why is my neighbor in another state getting a better mortgage rate?” The answer is multifaceted. It's not just about which state you live in, but a combination of factors specific to that region and your individual financial situation. Here's a breakdown:
- Lender Presence and Competition: Not all lenders operate nationwide. Some focus on specific regions. The more lenders competing in a state, the better the chance of lower rates due to market competition. I've seen this firsthand, where smaller, regional banks sometimes offer incredibly competitive rates to gain market share.
- State-Level Regulations: Mortgage regulations vary significantly from state to state. These rules can impact lender costs and, subsequently, the rates they offer. Some states have stricter consumer protection laws, which, while beneficial for borrowers, might slightly increase lender overhead and rates.
- Credit Score Averages: States with higher average credit scores tend to have lower rates overall. This is because lenders perceive less risk in those areas.
- Average Loan Size: The average loan size in a state can also play a role. In areas with higher property values and larger loan amounts, lenders might adjust rates to reflect the increased risk associated with larger mortgages.
- Risk Management Strategies: Ultimately, each lender has its own unique approach to managing risk. This influences the rates they are willing to offer, depending on their internal risk appetite.
The Cheapest vs. The Most Expensive: A State-by-State Snapshot
As of today, May 19, 2025, here's a quick look at the states with the most and least expensive mortgage rates:
States with the Lowest 30-Year Mortgage Rates (New Purchase):
State | Average Rate (%) |
---|---|
New York | 6.81-6.99 |
California | 6.81-6.99 |
Florida | 6.81-6.99 |
Colorado | 6.81-6.99 |
Tennessee | 6.81-6.99 |
Texas | 6.81-6.99 |
Georgia | 6.81-6.99 |
North Carolina | 6.81-6.99 |
Washington | 6.81-6.99 |
States with the Highest 30-Year Mortgage Rates (New Purchase):
State | Average Rate (%) |
---|---|
Alaska | 7.07-7.14 |
West Virginia | 7.07-7.14 |
Rhode Island | 7.07-7.14 |
Washington, D.C. | 7.07-7.14 |
Mississippi | 7.07-7.14 |
Montana | 7.07-7.14 |
North Dakota | 7.07-7.14 |
South Dakota | 7.07-7.14 |
Vermont | 7.07-7.14 |
National Mortgage Rate Averages: A Broader Perspective
It's important to remember that state-level rates are just one piece of the puzzle. Let's take a look at the national averages to get a better sense of the overall mortgage rate environment.
After a small increase in mortgage rates recently, 30-year new purchase mortgages have come down a bit for two days in a row. According to Zillow, as of today, the national average is 7.01%. In March, they dipped to 6.50%, which was the lowest we've seen in 2025 so far.
Here’s a snapshot of national averages for various loan types:
Loan Type | Rate (%) |
---|---|
30-Year Fixed | 7.01 |
FHA 30-Year Fixed | 7.37 |
15-Year Fixed | 6.05 |
Jumbo 30-Year Fixed | 6.97 |
5/6 ARM | 7.28 |
Understanding What Drives Mortgage Rate Fluctuations
Mortgage rates aren’t set in stone; they’re constantly influenced by a complex web of economic factors. As someone who's been following the market for years, I can tell you that predicting rates with 100% accuracy is impossible, but understanding the key drivers is crucial.
- The Bond Market (Specifically, 10-Year Treasury Yields): This is a big one. Mortgage rates tend to track the yield on the 10-year Treasury bond. When yields rise, mortgage rates usually follow suit, and vice versa.
- The Federal Reserve's Monetary Policy: The Fed's actions, especially regarding bond buying and interest rate adjustments, have a significant impact. Remember the pandemic era when the Fed was buying bonds left and right? That kept rates artificially low.
- Competition Among Lenders: The more lenders vying for your business, the better the rates you're likely to see. That's why shopping around is so important.
- Overall Economic Conditions: Factors like inflation, unemployment, and economic growth all play a role in shaping the mortgage rate environment.
- Global Events: Unexpected global events like political instability or economic crises can also cause market volatility and impact mortgage rates.
Don't Be Fooled by Teaser Rates: Get Your Personalized Rate
You've probably seen those incredibly low mortgage rates advertised online. They're tempting, but be warned: those are often “teaser rates.” They're cherry-picked to be the most attractive, and they may involve paying points upfront or require a perfect credit score and a small loan amount.
The rate you actually get will depend on your individual circumstances, including:
- Your Credit Score: A higher credit score generally means a lower rate.
- Your Income and Debt-to-Income Ratio (DTI): Lenders want to see that you can comfortably afford your mortgage payments.
- Your Down Payment: A larger down payment reduces the lender's risk and can translate into a lower rate.
- The Type of Loan: Different loan types (e.g., fixed-rate, adjustable-rate, FHA, VA) come with different rates.
Read More:
States With the Lowest Mortgage Rates on May 16, 2025
Projected Mortgage Rates for the Week of May 5-11, 2025
When Will Mortgage Rates Go Down from Current Highs in 2025?
The Fed's Rate Decisions: A Balancing Act
The Federal Reserve is in a tricky situation. They're trying to manage inflation without triggering a recession. Remember how aggressively the Fed raised rates in 2022 and 2023 to combat inflation? That had a huge impact on mortgage rates.
The Fed has held rates steady for its third meeting of the year, and it's possible we might not see another rate cut for several months. This means we could see multiple rate-hold announcements throughout 2025. The Fed is likely waiting to see more definitive data on inflation before making any further moves.
What This Means For You: Take Action and Shop Around!
In a fluctuating mortgage rate environment, staying informed and proactive is key. Here are my top tips for navigating the current market:
- Shop Around: Get quotes from multiple lenders. Don't just settle for the first rate you see. I recommend getting at least three quotes to compare.
- Improve Your Credit Score: Even a small improvement in your credit score can make a big difference in your interest rate.
- Save For a Larger Down Payment: The more you put down, the lower your interest rate is likely to be.
- Consider Different Loan Types: Explore different loan options to see which one best suits your needs and financial situation.
- Work With a Mortgage Professional: A qualified mortgage broker or loan officer can help you navigate the complexities of the mortgage market and find the best rate for your circumstances.
The Bottom Line
While states like New York, California, and Florida currently offer some of the lowest mortgage rates in the country, remember that your individual rate will depend on your unique financial profile. Don't get discouraged by national averages or teaser rates. Take the time to shop around, improve your credit score, and work with a professional to secure the best possible mortgage for your dream home.
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