Several factors affect mortgage rates, including:

1. Economic factors: What happens in the economy and how those events affect investors’ confidence influences mortgage pricing. Good and bad economic news has an inverse impact on the direction of mortgage rates. When the national economy is robust, and job growth high, mortgage rates tend to increase. This is partly due to investors deciding where to put their money.

2. Federal Reserve policy: The Federal Reserve doesn’t set mortgage rates, but its monetary policy decisions definitely influence them. The Fed can raise or lower short-term interest rates, which indirectly affects mortgage rates. When the Fed raises rates, it becomes more expensive for banks and lenders to borrow money; this translates to increased rates for borrowers. When the Fed lowers rates, it becomes cheaper to borrow money, resulting in lower mortgage rates.

3. Inflation: Rising inflation is often accompanied by rising interest rates, because when prices go up, the dollar loses buying power. Lenders demand higher interest rates as compensation.

4. Housing market conditions: Trends and conditions in the housing market also affect mortgage rates. When fewer homes are being built or offered for resale, the decline in home purchasing leads to a decline in the demand for mortgages and pushes interest rates downward.

5. Credit score: A higher credit score can earn you a lower mortgage rate.

6. Loan-to-value (LTV) ratio: The LTV ratio is the amount of the mortgage loan compared to the value of the property. A lower LTV ratio can result in a lower mortgage rate.

7. Home location: The location of the home can affect the mortgage rate. For example, homes in rural areas may have higher rates than homes in urban areas.

Its important to keep in mind that mortgage rates can vary substantially from lender to lender due to differences in their pricing strategies, cost structures, margins, and risk appetites.