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See what's happening with home values in more than 400 metropolitan areas with HSH's Home Value Tracker, just updated though the second quarter of 2022.

See what's happening with home values in more than 400 metropolitan areas with HSH's Home Value Tracker, just updated though the second quarter of 2022.

What mortgage rates is the Federal Reserve offering?

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The Federal Reserve doesn't set mortgage rates. Federal Reserve policies do influence the overall price of money in the marketplace as they manipulate their primary policy tools, which include the Federal Funds rate, Discount rate and interest they pay banks for holding onto excess reserves for them. The Federal Funds rate (an interest rate on overnight loans made between banks) -- and the Discount rate (a bank's cost of borrowing money from the Federal Reserve directly) both serve to increase or decrease a bank's costs of borrowing money to lend.

The Fed also can manipulate mortgage rates by directly intervening in the market for Mortgage-Backed Securities, something they have done at times when financial markets have seized up. HSH.com tracks the latest moves by the Federal Reserve and any effects their actions may have on mortgage markets and mortgage rates.

Outside the Fed's influence, mortgage rates and mortgage availability are a different story, though, and a much more complex one involving both primary and secondary mortgage markets, investor whims and desires and more. If you're interested, you can learn a lot about what moves mortgage rates and how the mortgage market works on HSH.com.

Ask the expert
Keith Gumbinger
Keith Gumbinger
Mortgage Expert
Vice President, HSH.com
About Keith: Mortgage market observer and analyst with 35 years experience... (more)
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Q: How are mortgage interest rates determined?
AUG 18, 2022
A:

Mortgage rates fluctuate from day to day, depending on a number of factors related to the economy and to choices made by investors. While some mortgage money comes from deposits held by banks and credit unions, most of the funds for borrowers come from investors in capital markets.

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Q: Will today's stock market influence tomorrow's mortgage rates?
AUG 16, 2022
A:

Mortgage rates are influenced by a variety of factors, rather than moving in lockstep with any one economic indicator. The stock market rises and falls for a wide variety of reasons, including global, economic and political issues, but as a broad rule of thumb, a rising stock market indicates optimism among investors about the economy.

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Q: Should I pay private mortgage insurance out of pocket or finance the cost?
AUG 12, 2022
A:

For the most part, this is a discussion about time. You should compare the total costs of the difference in the two interest rates over your given time horizon.

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