Homebuyers in These 15 States Get the Best Mortgage Rates

If you’re in the market for a home, you know there have been challenges the past couple of years. Lack of inventory and high mortgage interest rates are two of the biggest obstacles for homebuyers. And everyone wants a low mortgage rate to help them pay off the loan .

While the average mortgage rate is often cited, rates actually vary by state and city. Construction Coverage determined which states had the best rates by analyzing data from the Federal Financial Institutions Examination Council’s 2023 Home Mortgage Disclosure Act . The study was done using the percentage of fixed-rate mortgage holders whose rate is less than 7% as of 2023.

You may be surprised which states had the best rates.

1. Utah

Utah grabbed the No. 15 slot of states where homebuyers can get the best mortgage rates. For Utah homebuyers, 65% were able to get a mortgage at less than 7%.

2. Minnesota

In the study, Minnesota finished just ahead of Utah with 65.1% of fixed-rate mortgage holders having a rate less than 7%. For the overall housing market in Minnesota, the home value is about $340,000, up about 1.3% over the past year. Home prices have generally been on the rise in Minnesota.

3. California

You may be surprised to see California on the list where homebuyers can get the best mortgage rates, especially if you live outside of the state.

California is known for having some very expensive housing markets. However, according to the study, 65.2% of fixed-rate mortgage holders had a rate less than 7%.

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4. Arizona

Keep in mind that interest rates vary according to region because of things like local market conditions, laws, and the financial health of people living there.

Arizona was found to be among the best states for mortgage rates. Here, 65.5% of fixed-rate mortgage holders had a rate less than 7%.

5. Pennsylvania

Here’s another state to consider for good mortgage rates. The study showed Pennsylvania had 65.6% of fixed-rate mortgage holders seeing a rate less than 7%.

You may want to look at Pittsburgh when checking out the state and rates. It finished among the large metros with the best mortgage rates.

6. Washington

The study found Washington had about the same share of fixed-rate mortgages with rates below 7% as Pennsylvania.

Washington may not have the most affordable overall housing market, however. The average home value is above $600,000, up about 3.7% over the past year, and a home goes to “pending” in around 10 days.

7. Maryland

Per the study, Maryland had nearly 66% of fixed-rate mortgages with rates below 7%. Again, you may not expect to see Maryland on a list of places where you can get good deals on housing.

The state has housing prices about 44% higher than the national average. The cost of living is 16% higher than the national average.

8. Nevada

We head back out west for the next state on the list of places to get the best mortgage rates. Here 66.5% of homebuyers got a rate below 7%. Further, Reno was among the midsize metros with the best mortgage rates.

Nevada may be among the more affordable states on our list. The average home value is about $445,000, up around 6% over the past year.

9. New York

There’s good news from the study if you’re considering buying a home in New York. The state ranked seventh among the top places to get the best mortgage rates.

That’s not all. Some metro areas also ranked highly for their rates. Along with New York City, Ithaca and Elmira also made the lists for metros with the best mortgage rates.

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10. Connecticut

If New York makes the list, you might not be surprised to see Connecticut just above it, with 68% of buyers getting a rate less than 7%.

Hartford also made the list of large metros with the best mortgage rates. Home values and prices have been rising quite quickly in Connecticut. In fact, the average home value is about $412,000, up about 9.7% over the past year.

11. Iowa

The middle of the country brings us our next state where homebuyers can get the best mortgage rates. About 68.1% of fixed-rate mortgage holders had a rate below 7%.

You may already be considering Iowa as an overall affordable option. The cost of living is about 6% below the national average, with housing 19% lower.

12. Colorado

There are several metro areas to check out in Colorado, another state that ranked highly (No. 4) on the list of places where homebuyers can get the best mortgage rates.

First, Denver was near the top of the list of large metros with the best mortgage rates. Fort Collins, Colorado Springs, Greeley, and Boulder also ranked highly for having good mortgage rates.

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13. Massachusetts

When it comes to states where homebuyers can get the best mortgage rates, Massachusetts was ranked among the top three. About 69.8% of fixed-rate mortgage holders had rates below 7%.

Keep in mind, the total cost of living in Massachusetts is around 46% higher than the national average, with housing 108% higher than the national average.

14. Alaska

We head north of the Lower 48 for our next stop. Alaska was among the top two states where homebuyers can get the best mortgage rates. About 72.3% of fixed-rate mortgage holders saw rates below 7%. The downside of Alaska is tha, the cost of living is 31% higher than the national average.

15. North Dakota

Are you surprised to see North Dakota at the top of the list for states where you can get the best mortgage rates? About 73% of fixed-rate mortgage holders saw rates below 7%.

The good news doesn’t stop there. North Dakota has a cost of living around 6% below the national average, with housing 16% lower.

Bottom Line

If you’re looking to buy a home and searching for the best mortgage rates, there are options across the country. From North Dakota to Pennsylvania, you can find fixed-rate mortgage options with rates below 7%. The best money move a homeowner can make is to get a low fixed-rate mortgage.

If you’re feeling frustrated, keep this in mind: Many prospective buyers are being forced to search for deals amid a combination of high home prices and expensive financing.

Money tips that can work for everyone

No matter what your bank account balance is, there's always an opportunity to optimize and improve your finances. Here's a quick checklist of things you can look at today.

Focus on paying off your debt . Debt can hold you back from making progress with your overall financial well-being. Aside from cutting expenses, there are tools that can help you pay off debt faster like balance transfer credit cards and debt counseling.

Earning extra income can give you breathing room. If finances are tight, earning some extra money to supplement your income can make a huge difference. A new job is one option to consider, but if you're not ready to make a big change or already retired, a part-time side job could be a better choice.

Cut your expenses. It sounds painful and so not fun, but it doesn't have to be. Take a look at your biggest expenses because that's where you'll probably find the biggest savings. For example, auto insurance rates have been soaring so shopping around for a new insurance company can be the fastest way to cut your bill. Also, look for ways to cut your grocery bill (despite rising inflation).