• Home 1
  • Privacy Policy
LSD News
  • Home
  • Business
  • Crypto News
  • Finance
  • Health
  • Politics
  • Sports
  • Stock
  • Tech
  • Travel
No Result
View All Result
  • Home
  • Business
  • Crypto News
  • Finance
  • Health
  • Politics
  • Sports
  • Stock
  • Tech
  • Travel
No Result
View All Result
LSD News
No Result
View All Result
Home Finance

How the Federal Reserve’s rate policy affects mortgages

by
December 22, 2024
in Finance
0
How the Federal Reserve’s rate policy affects mortgages
0
SHARES
0
VIEWS
Share on FacebookShare on Twitter


The Federal Reserve lowered its interest rate target three times in 2024.

This has many Americans waiting for mortgage rates to fall. But that may not happen for some time.

“I think the best case scenario is we’re going to continue to see mortgage rates hover around six and a half to 7%,” said Jordan Jackson, a global market strategist at J.P. Morgan Asset Management. “So unfortunately for those homeowners who are looking for a bit of a reprieve on the mortgage rate side, that may not come to fruition,” Jordan said in an interview with CNBC.

Mortgage rates can be influenced by Fed policy. But the rates are more closely tied to long-term borrowing rates for government debt. The 10-year Treasury note yield has been increasing in recent months as investors consider more expansionary fiscal policies that may come from Washington in 2025. This, combined with signals sent from the market for mortgage-backed securities, determine the rates issued within new mortgages.

Economists at Fannie Mae say the Fed’s management of its mortgage-backed securities portfolio may contribute to today’s mortgage rates.

In the pandemic, the Fed bought huge amounts of assets, including mortgage-backed securities, to adjust demand and supply dynamics within the bond market. Economists also refer to the technique as “quantitative easing.”

Quantitative easing can reduce the spread between mortgage rates and Treasury yields, which leads to cheaper loan terms for home buyers. It can also provide opportunities for owners looking to refinance their mortgages. The Fed’s use of this technique in the pandemic brought mortgages rates to record lows in 2021.

“They were extra aggressive in 2021 with buying mortgage-backed securities. So, the [quantitative easing] was probably ill-advised at the time.” said Matthew Graham, COO of Mortgage News Daily.

In 2022, the Federal Reserve kicked off plans to reduce the balance of its holdings, primarily by allowing those assets to mature and “roll-off” of its balance sheet. This process is known as “quantitative tightening,” and it may add upward pressure on the spread between mortgage rates and Treasury yields.

“I think that’s one of the reasons the mortgage rates are still going in the wrong direction from the Federal Reserve’s standpoint,” said George Calhoun, director of the Hanlon Financial Systems Center at Stevens Institute of Technology.

Watch the video above to learn how the Fed’s decisions affect mortgage rates.

Tags: affectsBreaking News: Economybusiness newsCentral bankingConsumer financeEconomic eventsEconomic outlookEconomic policyeconomisteconomyFederalFederal Reserve SystemGovernment financeHome buyersHome buyingHome pricesHousing policyHousing rentalHousing vacancies and homeownershipInterest rate spreadInterest RatesJerome PowellMortgage figuresMortgage financingMortgage ratesMortgage refinancingMortgage-Backed SecuritiesMortgagesNeutralNew York FedPersonal financepolicyrateReal estatereservesTreasury notesTreasury securitiesU.S. 10 Year TreasuryU.S. Department of the TreasuryU.S. Treasury bondsUnited StatesWashington D.C.
Previous Post

Breakout Stocks: How to trade KPR Mill, Newgen Software and General Insurance on Monday? – Market Summary

Next Post

Video: Congress Approves Spending Package After Political Drama

Next Post
Video: Congress Approves Spending Package After Political Drama

Video: Congress Approves Spending Package After Political Drama

Stay Connected test

  • 139 Followers
  • 205k Subscribers
  • 23.9k Followers
  • 99 Subscribers
ADVERTISEMENT
  • Trending
  • Comments
  • Latest
As Binance works toward redemption, CEO says Trump has been ‘fantastic’ for crypto

As Binance works toward redemption, CEO says Trump has been ‘fantastic’ for crypto

March 23, 2025
Georgia realtor receives invitation to play the Masters by mistake | CNN

Georgia realtor receives invitation to play the Masters by mistake | CNN

July 18, 2023
What made Pelé so great | CNN

What made Pelé so great | CNN

July 19, 2023
Left-Wing Democrats Wait on AOC’s Decision as They Look to 2028 Election

Left-Wing Democrats Wait on AOC’s Decision as They Look to 2028 Election

March 23, 2025
Tech layoffs in Southeast Asia mount as unprofitable startups seek to extend their runways

Tech layoffs in Southeast Asia mount as unprofitable startups seek to extend their runways

5
Contact lens maker faces lawsuit after woman said the product resulted in her losing an eye

Contact lens maker faces lawsuit after woman said the product resulted in her losing an eye

5
Why Cristiano Ronaldo’s move to Saudi Arabia means so much for the Gulf monarchy’s sporting ambitions | CNN

Why Cristiano Ronaldo’s move to Saudi Arabia means so much for the Gulf monarchy’s sporting ambitions | CNN

3
Georgia realtor receives invitation to play the Masters by mistake | CNN

Georgia realtor receives invitation to play the Masters by mistake | CNN

1
Trump sets Sunday night deadline for Hamas to back Gaza plan

Trump sets Sunday night deadline for Hamas to back Gaza plan

October 3, 2025
US stocks open higher as rate-cut hopes drive momentum

US stocks open higher as rate-cut hopes drive momentum

October 3, 2025
Jeff Bezos says AI is in an industrial bubble but society will get ‘gigantic’ benefits from the tech

Jeff Bezos says AI is in an industrial bubble but society will get ‘gigantic’ benefits from the tech

October 3, 2025
Ethereum 150% Surge Against Bitcoin Loses Steam After 40 Days

Ethereum 150% Surge Against Bitcoin Loses Steam After 40 Days

October 3, 2025

Recent News

Trump sets Sunday night deadline for Hamas to back Gaza plan

Trump sets Sunday night deadline for Hamas to back Gaza plan

October 3, 2025
US stocks open higher as rate-cut hopes drive momentum

US stocks open higher as rate-cut hopes drive momentum

October 3, 2025
Jeff Bezos says AI is in an industrial bubble but society will get ‘gigantic’ benefits from the tech

Jeff Bezos says AI is in an industrial bubble but society will get ‘gigantic’ benefits from the tech

October 3, 2025
Ethereum 150% Surge Against Bitcoin Loses Steam After 40 Days

Ethereum 150% Surge Against Bitcoin Loses Steam After 40 Days

October 3, 2025

We bring the latest news from all over the world and get all time updated you

Follow Us

Browse by Category

  • Business
  • Crypto News
  • Finance
  • Health
  • Politics
  • Sports
  • Stock
  • Tech
  • Travel
  • Uncategorized

Recent News

Trump sets Sunday night deadline for Hamas to back Gaza plan

Trump sets Sunday night deadline for Hamas to back Gaza plan

October 3, 2025
US stocks open higher as rate-cut hopes drive momentum

US stocks open higher as rate-cut hopes drive momentum

October 3, 2025
No Result
View All Result
  • Home 1
  • Privacy Policy

© 2024 LSD News title="Jegtheme">Jegtheme.