15 Cities Where Homebuyers Get the Best Interest Rates

Editor's Note: This story originally appeared on Construction Coverage.

After an extended run of intense competition and high prices in the residential real estate market, 2022 is bringing signs that the market could begin to cool soon.

With inflation on the rise and home prices still rising, more homebuyers are finding themselves unable to afford the cost of real estate. And with the U.S. Federal Reserve poised to raise interest rates throughout 2022, the cost of mortgages could grow even more and deter would-be buyers.

The Fed’s March 2022 decision to raise rates and signal more increases in the near future could mean the end of a long period of historically low interest rates dating back to the Great Recession of about 15 years ago. For homebuyers, this means that mortgage interest rates have already started to tick up and will likely continue to rise in the months ahead.

The average interest rates for both 15-year fixed rate mortgages and 30-year fixed rate mortgages are up by more than a percentage point since the beginning of 2022.

To determine the locations where home buyers get the best interest rates, researchers at Construction Coverage calculated the share of all fixed-rate mortgages— including both 15- and 30-year — that were below a 3.0% interest rate. The data used in this analysis is from the Federal Financial Institutions Examination Council’s Home Mortgage Disclosure Act. Only conventional home purchase loans approved in 2020 with a fixed interest rate were considered in this analysis.

Here are the U.S. metropolitan areas where homebuyers get the best interest rates.

15. Raleigh-Cary, NC

• Share of fixed-rate mortgages with <3.0% rate: 39.2%
• Share of 30-year mortgages with <3.0% rate: 38.0%
• Share of 15-year mortgages with <3.0% rate: 67.2%
• Median interest rate across all fixed-rate mortgages: 3.13%

14. Los Angeles-Long Beach-Anaheim, CA

• Share of fixed-rate mortgages with <3.0% rate: 39.2%
• Share of 30-year mortgages with <3.0% rate: 39.2%
• Share of 15-year mortgages with <3.0% rate: 66.3%
• Median interest rate across all fixed-rate mortgages: 3.13%

13. Philadelphia-Camden-Wilmington, PA-NJ-DE-MD

• Share of fixed-rate mortgages with <3.0% rate: 39.3%
• Share of 30-year mortgages with <3.0% rate: 38.4%
• Share of 15-year mortgages with <3.0% rate: 62.5%
• Median interest rate across all fixed-rate mortgages: 3.13%

12. Pittsburgh, PA

• Share of fixed-rate mortgages with <3.0% rate: 39.6%
• Share of 30-year mortgages with <3.0% rate: 37.9%
• Share of 15-year mortgages with <3.0% rate: 66.3%
• Median interest rate across all fixed-rate mortgages: 3.13%

11. Portland-Vancouver-Hillsboro, OR-WA

• Share of fixed-rate mortgages with <3.0% rate: 39.7%
• Share of 30-year mortgages with <3.0% rate: 39.3%
• Share of 15-year mortgages with <3.0% rate: 69.9%
• Median interest rate across all fixed-rate mortgages: 3.13%

10. Riverside-San Bernardino-Ontario, CA

• Share of fixed-rate mortgages with <3.0% rate: 39.7%
• Share of 30-year mortgages with <3.0% rate: 39.8%
• Share of 15-year mortgages with <3.0% rate: 63.2%
• Median interest rate across all fixed-rate mortgages: 3.13%

9. Seattle-Tacoma-Bellevue, WA

• Share of fixed-rate mortgages with <3.0% rate: 40.4%
• Share of 30-year mortgages with <3.0% rate: 40.2%
• Share of 15-year mortgages with <3.0% rate: 71.5%
• Median interest rate across all fixed-rate mortgages: 3.13%

8. Austin-Round Rock-Georgetown, TX

• Share of fixed-rate mortgages with <3.0% rate: 40.4%
• Share of 30-year mortgages with <3.0% rate: 40.9%
• Share of 15-year mortgages with <3.0% rate: 53.7%
• Median interest rate across all fixed-rate mortgages: 3.13%

7. San Diego-Chula Vista-Carlsbad, CA

• Share of fixed-rate mortgages with <3.0% rate: 41.2%
• Share of 30-year mortgages with <3.0% rate: 41.1%
• Share of 15-year mortgages with <3.0% rate: 73.1%
• Median interest rate across all fixed-rate mortgages: 3.13%

6. New York-Newark-Jersey City, NY-NJ-PA

• Share of fixed-rate mortgages with <3.0% rate: 41.4%
• Share of 30-year mortgages with <3.0% rate: 40.6%
• Share of 15-year mortgages with <3.0% rate: 61.2%
• Median interest rate across all fixed-rate mortgages: 3.13%

5. Washington-Arlington-Alexandria, DC-VA-MD-WV

• Share of fixed-rate mortgages with <3.0% rate: 42.2%
• Share of 30-year mortgages with <3.0% rate: 41.2%
• Share of 15-year mortgages with <3.0% rate: 74.7%
• Median interest rate across all fixed-rate mortgages: 3.13%

4. Sacramento-Roseville-Folsom, CA

• Share of fixed-rate mortgages with <3.0% rate: 42.2%
• Share of 30-year mortgages with <3.0% rate: 41.8%
• Share of 15-year mortgages with <3.0% rate: 73.8%
• Median interest rate across all fixed-rate mortgages: 3.13%

3. San Jose-Sunnyvale-Santa Clara, CA

• Share of fixed-rate mortgages with <3.0% rate: 42.2%
• Share of 30-year mortgages with <3.0% rate: 42.6%
• Share of 15-year mortgages with <3.0% rate: 75.0%
• Median interest rate across all fixed-rate mortgages: 3.00%

2. San Francisco-Oakland-Berkeley, CA

• Share of fixed-rate mortgages with <3.0% rate: 43.6%
• Share of 30-year mortgages with <3.0% rate: 43.5%
• Share of 15-year mortgages with <3.0% rate: 72.7%
• Median interest rate across all fixed-rate mortgages: 3.00%

1. Boston-Cambridge-Newton, MA-NH

• Share of fixed-rate mortgages with <3.0% rate: 43.7%
• Share of 30-year mortgages with <3.0% rate: 42.4%
• Share of 15-year mortgages with <3.0% rate: 78.2%
• Median interest rate across all fixed-rate mortgages: 3.00%

Methodology

The data used in this analysis is from the Federal Financial Institutions Examination Council’s Home Mortgage Disclosure Act. Only conventional home purchase loans approved in 2020 with a fixed interest rate were considered in this analysis.

To determine the locations where buyers get the best interest rates, researchers calculated the share of all fixed-rate mortgages — including both 15- and 30-year — that were below a 3.0% interest rate. In the event of a tie, locations with a higher share of 30-year mortgages below a 3.0% interest rate were ranked higher. To improve relevance, only metropolitan areas with at least 100,000 residents were included.