The National Association of Realtors (NAR) reported on August 22 that existing home sales in July were 1.3% higher than in June, with a seasonally adjusted annual rate of 3.95 million. However, on a year-over-year basis, sales fell 2.5% from 4.05 million in July 2023. 

“Despite the modest gain, home sales are still sluggish,” said NAR Chief Economist Lawrence Yun. “But consumers are definitely seeing more choices, and affordability is improving due to lower interest rates.”

According to NAR, three out of four U.S. regions experienced increasing sales in July: Northeast (up 4.3%), West (up 1.4%), and South (1.1%). The median single-family home price was $428,000, 4.2% higher than a year ago. 

First-time home buyers accounted for almost 30% of July’s sales. They are more sensitive to interest rates and affordability. 

Here are the five states where mortgage rates are lowest as of Sept. 11

New York

According to Zillow mortgage data for Sept. 11, New York state has the lowest 30-year fixed mortgage rate at 5.90%. That’s for a new loan with 20% down and a credit score of 680 to 739. The national average is 6.08%.

However, because the state’s home prices are higher —the average home in New York is $449,826, a little more than $100,000 higher than the national average of $349,770 —the mortgages will be bigger than average. 

Using Zillow’s mortgage calculator, a 30-year fixed mortgage of $359,861, including property tax, homeowner’s insurance, and mortgage insurance — after 20% down on New York’s average home price of $449,826 — has an estimated monthly payment of $3,155.  

The total principal and interest payments over the life of the mortgage are $359,861 and $408,545, respectively.  

Florida

According to Zillow, Florida is tied for second place with Texas for the lowest mortgage rate at 6.01%. Home prices in the state are 12% more expensive than the national average at $392,922. 

Using Zillow’s mortgage calculator, a 30-year fixed mortgage of $314,338, including property tax, homeowner’s insurance, and mortgage insurance—after 20% down on Florida’s average home price of $392,922—has an estimated monthly payment of $2,791.  

The total principal and interest payments over the life of the mortgage are $314,338 and $364,849, respectively.  

Texas

Tied with Florida for the second-lowest mortgage rate by state, at 6.01%, the average home value is 14% less than the national average of $302,281. No wonder the state is popular with Americans looking for more affordable housing in other states.

Using Bank of America’s mortgage calculator, a 30-year fixed mortgage of $241,825—after 20% down on Texas’s average home price of $302,281—has an estimated monthly payment of $2,172.  

The total principal and interest payments over the life of the mortgage are $241,825 and $280,684, respectively.  

California

California has the highest population in the U.S. at 38.9 million, 25% higher than Texas, the second-most populated state in the union, and almost as large as the entire country of Canada at 41.0 million.

Despite having the highest population in the U.S., California’s 30-year fixed mortgage rate is 6.02%, one basis point higher than Florida and Texas and 12 basis points higher than New York, with the country’s lowest mortgage rate. 

According to Mercer, the state has two of the world’s most expensive cities to live in—Los Angeles is 10th and San Francisco is 13th. It’s not surprising that the state has the highest average home value, at $744,280, more than double the national average. 

Remarkably, the average mortgage amount borrowed by Rocket Mortgage customers in the state in 2023 was $287,865.  

Using Bank of America’s mortgage calculator, a 30-year fixed mortgage of $595,424—after 20% down on California’s average home price of $744,280—has an estimated monthly payment of $4,979.  

The total principal and interest payments over the life of the mortgage are $595,424 and $692,684, respectively.  

Washington

The number of high-paid technology workers in the state can partly explain that. Common factors influencing mortgage rates include local economic conditions, the cost of doing business, the competition in the region, and lending regulations.

Using Bank of America’s mortgage calculator, the rate for a 30-year fixed mortgage of $459,291—after 20% down on Washington’s average home price of $574,114—has an estimated monthly payment of $3,870.  

The total principal and interest payments over the life of the mortgage are $459,291 and $536,293, respectively. 

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