Cities With Best Mortgage Rates

A new analysis from Construction Coverage highlights the U.S. cities and states where homebuyers are still securing the most favorable mortgage rates. Researchers ranked locations by the share of approved fixed-rate loans under 7% in 2024, using the latest data from the Home Mortgage Disclosure Act.

Key Takeaways

• Sub-7% Mortgage Rates Are Common—But Not Guaranteed: Nationwide, roughly 65% of approved fixed-rate loans in 2024 had rates below 7%, but the likelihood of securing one varied significantly by location.
• Some States Help Buyers Beat the Rate Squeeze: In Alaska and North Dakota, more than 75% of approved home loans had rates under 7%—the highest shares in the country. Following closely were Iowa, Massachusetts, South Dakota, Colorado, and Connecticut, all with shares over 70%.
• Southern Markets See Least Favorable Rates: In Mississippi, just 43.1% of borrowers locked in rates below 7%, the lowest share of any state. Other Southern states like Louisiana (53.5%), Oklahoma (55.5%), and Alabama (57.8%) also ranked near the bottom.
• Best Metros for Prospective Homebuyers: In high-ranking large metros like DC, Boston, and Austin, around 75% of buyers locked in sub-7% rates despite above-average home prices. By contrast, fewer than 60% of buyers secured those rates in major Southern metros like Miami, Birmingham, and Oklahoma City.

After climbing to a staggering 18.63% in the early 1980s, the average 30-year fixed mortgage interest rate steadily declined for nearly four decades. This long-term downward trend resulted in a historic low of 2.65% in early 2021, driven by both a long period of falling inflation and pandemic-era monetary stimulus.

That period of low inflation came to an abrupt end in the wake of the COVID-19 pandemic. Supply chain disruptions, labor shortages, and expansive fiscal policy contributed to the sharpest price increases in decades. In response, the Federal Reserve launched a series of aggressive interest rate hikes aimed at curbing price growth. Mortgage rates rose rapidly—reaching 7.79% by October 2023—before settling into a range between 6.6% and 7.0% in early 2025.

While current rates remain well below the highs of the 1980s, the speed of the increase has been unprecedented. In November 2022, the year-over-year increase in mortgage rates peaked at 138%—far outpacing the roughly 50% increase seen during the early 1980s. The result has been a dramatic reduction in housing affordability: the estimated monthly mortgage payment for a median-priced U.S. home is now nearly 60% higher than it was just three years ago, primarily due to increased borrowing costs.