Mortgage Rates Map Shows Most Affordable States For Homebuyers

Mortgage rates fell to a two-month low, and a Newsweek original map shows that rates for 30-year mortgages in seven states are now under 7.6 percent—the lowest in the country.

Florida, Illinois, New York, New Jersey, Georgia, Michigan and Indiana all have 30-year mortgage rates below 7.6 percent based on a 700 to 719 credit score range, the map illustrates, using data from the Consumer Financial Protection Bureau. These rates represent a significant drop as the average mortgage rate hit a high of 7.79 percent in the last week of October, the highest level since November 2000, according to Freddie Mac.

This week saw some positive movement in the housing market with mortgage applications rising 3 percent for the week ending November 17, their highest level in six weeks, according to the Mortgage Bankers Association.

But this slight comeback comes after a significant period of stagnation. Total home sales were down 10 percent compared to the same period last year as of September, according to Freddie Mac, and existing home sales were at their lowest level in 13 years just two months ago, according to the National Association of Realtors. Existing home sales dropped 2 percent month-over-month in September.

"With the rate lock-in effect keeping many existing homeowners out of the market, inventory of homes for sale remains lean," said a report from Freddie Mac. "The number of existing homes for sale declined 8.1 percent year-over-year in September."

Mortgage Rates Fall Nationwide

Thirty-year mortgage rates dropped nationwide between November 16 and November 21, according to the Consumer Financial Protection Bureau. Those rates fell to 7.5 percent in both Florida and Illinois on November 21, down from 7.63 percent on November 16, assuming a credit score of 700 to 719, CFPB data shows.

The states with the highest rates are Hawaii, New Mexico and Alaska. Rates in Hawaii remained unchanged at 7.88 percent on November 21, but New Mexico and Alaska saw rates fall 0.13 percent to 7.75 percent.

Rate Drop Significant for Housing Affordability

J.P. Morgan this week offered a glimpse of when housing affordability will be achieved in the U.S. market, predicting a 3 1/2-year journey to affordability. Housing affordability is defined by Moody's Analytics Chief Economist Mark Zandi as American families spending less than 30 percent of their household income on housing.

A decline in mortgage rates will hasten this time horizon, the J.P. Morgan report said.

"Our analysis of the timing is notably sensitive to mortgage rates," the report said. "If the market's pricing of mortgage rates were to fall by just one percentage point, U.S. homes could be affordable again in just two years."