The Federal Reserve announced that it’s holding interest rates steady this week leaving the federal funds rate at a target range of 5.25 to 5.5 percent. It’s the sixth time in the last seven meetings that the Fed has left rates unchanged, though the central bank has raised rates a total of 11 times during this economic cycle in an effort to tamp down high inflation.
While the federal funds rate doesn’t really impact mortgage rates which depend largely on the 10-year Treasury yield, they’re often moving the same way for similar reasons. With the 10-year Treasury yield falling to end 2023 and then bouncing around to start 2024, mortgage rates have gone along for the ride.
Source: Bank Rate
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Mortgage Rates
Increase
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After decreasing for a couple of weeks, mortgage rates are once again on the upswing. As the spring homebuying season gets underway, existing home inventory has increased slightly and new home construction has picked up. Despite elevated rates, homebuilders are displaying renewed confidence in the housing market, focusing on the fact that there is a good amount of pent-up demand, an ongoing supply shortage and expectations that the Federal Reserve will cut rates later in the year.
