What does the Fed’s decision to raise key interest rates by three-quarters percentage points mean for mortgages? [Here’s what the Fed’s decision means for credit cards, car loans and student loans.]
30-year fixed mortgage rates are not tied to the FRB’s benchmark rates, but instead track yields on 10-year government bonds that are affected by a variety of factors, including inflation expectations, FRB behavior and methods. increase. Investors react to it all.
Freddie Mac’s Deputy Chief Economist, Renkeefer, said: “Maybe inflation is more tenacious than the market thinks.”
Mortgage rates have risen 2 percentage points since the beginning of 2022, but have been somewhat stable in recent months. However, as consumer prices remain soaring, mortgage rates are rising again, reaching 6%, with some estimates.
I was watching closely Rate average The release from Freddie Mac won’t be until Thursday, but it’s already a bit higher last week. According to Freddie Mac’s major mortgage survey, interest rates on 30-year fixed rate mortgages were 5.23% as of June 9, up from 5.09. Percentages from the previous week and 2.96% from the same week in 2021.
Other mortgages are more closely tied to the Fed’s move. Home equity credit lines and floating rate mortgages (floating rates respectively) usually rise within two billing cycles after the federal funds rate change.
