What the Fed's rate hike means for mortgages

What is the Fed’s decision to raise its policy rate by three-quarters of a percentage point mean for mortgages? [Here’s what the Fed’s ...

What is the Fed’s decision to raise its policy rate by three-quarters of a percentage point mean for mortgages? [Here’s what the Fed’s decision means for credit cards, car loans and student loans.]

30-year fixed mortgage rates do not move in parallel with the Fed’s benchmark rate, but rather follow the yield of 10-year Treasury bills, which are influenced by a variety of factors, including market expectations. inflation, Fed actions and how investors are reacting to it all.

“We’re seeing rates rising quite rapidly and a lot of that has to do with forward-looking expectations of where things are going,” said Len Kiefer, deputy chief economist at Freddie Mac. “Perhaps inflation will be more rigid than the market thought.”

Mortgage rates have jumped two percentage points since the start of 2022, although they have remained relatively stable in recent months. But with the consumer prices continue to risemortgage rates are on the rise again – by some estimates as high as 6%.

Watched them closely average rates by Freddie Mac won’t be out until Thursday, but they’ve already started to rise a bit last week: 30-year fixed-rate mortgage rates were 5.23% as of June 9, according to the main survey on Freddie Mac mortgages, down from 5.09 percent the previous week and 2.96 percent the same week in 2021.

Other home loans are more closely tied to the Fed’s decision. Home equity lines of credit and adjustable rate mortgages — which each carry variable interest rates — typically increase within two billing cycles after a change in federal funds rates.

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Newsrust - US Top News: What the Fed's rate hike means for mortgages
What the Fed's rate hike means for mortgages
Newsrust - US Top News
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