The Federal Reserve doesn't set mortgage rates, but its interest rate decisions may influence them.
The Federal Reserve slashed the federal funds rate last week for the first time in four years, boosting borrower hopes that the cut trickles down into new mortgage and refinance rates. The Fed's action ends 14 months of rate pauses that, along with inflation, unemployment and other factors, have prolonged elevated borrowing costs.Although the Fed doesn't directly set rates for home loans, its decisions may influence them.
'Explore the most affordable mortgage loan options available to you here.Do mortgage rates price in anticipated rate changes?Yes, mortgage rates often react to anticipated Federal Reserve rate changes before they happen. For example, if the Fed is expected to raise rates, lenders may raise their rates beforehand to avoid paying higher borrowing costs later.
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