Does Fed Rate Change Affect Mortgage Rates?

1 year ago
303

#shorts
No, The Fed Hike Doesn't Mean Anything For Mortgage Rates There's a common misconception that the Fed "sets" (or hikes/cuts) mortgage rates directly. There is often a belief that changes in the Fed Funds Rate translate in some direct way to changes in mortgage rates. What is the Fed Funds Rate? The Fed Funds Rate is a target set by the Fed for interest charged by big banks to lend money to each other on an overnight basis. Whereas the Fed Funds Rate pertains to loans that last 24 hours or less, the average mortgage lasts 3-10 years depending on the housing and mortgage environments. So why do rates sometimes react so much to Fed announcements? The Fed may not set mortgage rates directly, but they can still say/do things that have a tremendous impact on all manner of interest rates. Because the market can show up to the party so far in advance of the Fed itself, it's not uncommon to see mortgage rates move in the opposite direction of the Fed on the day the Fed actually makes its move.

Let us help you find your next home.

Search Today!

www.homesinorlando.forsale

CALL DIRECT: 407-710-8720

#fedratehike #mortgagerates #homebuyers #orlandofl #orlandorealtor #orlandorealestate #homesinorlandoforsale #orlandorealestateagent #orangecountyfl #homesales #applihl #homesellers #homesforsale #homesforsaleinorlando #mortgagerates #realestate #realestatenews #newhomes #newhomesales #realestateinvestor #investmentproperties #appli #nexthome #housingmarket #housingmarket2022 #economicninja #michaelburry

Loading comments...