Lowest Mortgage Rates Currently Available in Various States - July 18, 2025
In the current economic landscape, mortgage rates vary significantly across different states in the United States. The national average for a 30-year fixed mortgage stands at 6.91%, but rates in some states hover between 6.78% and 6.89%, while others are around 6.97% to 7.07%.
The Federal Reserve's actions, inflation, and economic growth play a crucial role in shaping mortgage rates. As of June 2025, the Fed has reaffirmed plans for two more rate cuts in 2025, although the timing of these cuts is under debate among policymakers. The bond market, too, is pricing in a relatively low chance of a rate cut in July 2025, with higher odds for cuts in September or October.
However, mortgage rates are not just determined by federal policies. Several factors contribute to differences in mortgage rates by state.
State Regulations: Variations in state laws governing mortgage lending can affect lender costs. Some states impose more stringent regulations, licensing requirements, or consumer protections that increase operational expenses for lenders, which can lead to higher mortgage rates in those states.
Lender Presence and Competition: States with many active lenders typically see stronger competition, which tends to lower mortgage rates as lenders compete to attract borrowers. Conversely, limited lender presence in some states reduces competition and can result in higher rates.
Credit Score Averages: States where residents generally have higher average credit scores tend to have lower mortgage rates. Lenders view borrowers with higher scores as less risky, thus offering better rates. Areas with lower average credit scores face slightly higher rates due to perceived higher lending risk.
Average Loan Size: The typical loan amount in a state influences mortgage rates. Because certain fixed operational costs apply regardless of loan size, smaller average loans might carry proportionally higher rates, while larger loans can sometimes secure slightly better rates, though jumbo loans have their own pricing structures.
Risk Management Strategies: Lenders assess risk subjectively and determine rates based on their risk appetite and portfolio strategies. If a lender perceives a state’s housing market or borrower profile as riskier, it may charge higher rates to mitigate potential losses.
Examples of states with relatively lower mortgage rates (e.g., New York, California, Virginia, Washington) often combine strong lender competition, higher credit score averages among residents, stable housing markets, and regulatory environments favorable to lenders, helping reduce mortgage costs. Conversely, states with fewer lenders, more restrictive laws, lower credit quality, or smaller average loan sizes tend to have higher mortgage rates.
Investing in turnkey real estate can help secure consistent returns with fluctuating mortgage rates. To secure the best mortgage rate, analysts suggest improving your credit score, saving for a larger down payment, shopping around and comparing rates, considering different loan types, negotiating with lenders, and locking in your rate.
The upcoming Fed meeting on July 30, 2025, could provide clues about the timing of future rate cuts. If the Fed follows through with its planned rate cuts, analysts project that 30-year mortgage rates could decline to around 5% by 2028. This is up slightly from yesterday but better than mid-May when rates hit a one-year high of 7.15%.
[1] State-specific Regulations and Mortgage Rates: A Comprehensive Analysis [2] The Impact of Lender Presence and Competition on Mortgage Rates [4] Credit Score, Loan Size, and Mortgage Rates: An Empirical Study
This article is for informational purposes only and does not constitute financial advice. Readers should consult with a financial advisor before making any financial decisions.
- State-specific regulations can impact mortgage rates by affecting lender costs, as variations in state laws governing mortgage lending can lead to increased operational expenses and, consequently, higher mortgage rates.
- The presence and competition among lenders in a state play a significant role in determining mortgage rates – states with many active lenders tend to have lower mortgage rates due to stronger competition, while limited lender presence in some states can result in higher rates.
- The average credit score within a state is another crucial factor influencing mortgage rates – areas where residents have higher average credit scores typically have lower mortgage rates, as lenders view borrowers with higher scores as less risky and offer better rates.
- The typical loan amount in a state is also influential – smaller average loans might carry higher rates due to proportionally higher fixed operational costs, while larger loans can sometimes secure slightly better rates, although jumbo loans have their own pricing structures.
- Lenders' risk management strategies can lead to differences in mortgage rates – if a lender perceives a state’s housing market or borrower profile as riskier, it may charge higher rates to mitigate potential losses.
- Investing in turnkey real estate and improving credit scores, saving for a larger down payment, shopping around for mortgage rates, comparing offers, considering different loan types, negotiating with lenders, and locking in your rate can help secure consistent returns and secure the best mortgage rates, even with fluctuating rates on the market.
