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Message
re: Average New home price biggest drop since 2008
Posted on 8/3/22 at 1:11 pm to Bard
Posted on 8/3/22 at 1:11 pm to Bard
quote:
Just think, the new .75 increase hasn't had time to filter out into the economy yet and we likely have at least another .5 increase coming by the Fed's November meeting.
Mortgage rates aren't tied to the federal funds rate (aka "the fed"). They are tied to the yield of the 10 yr Treasury Note.
Posted on 8/3/22 at 2:40 pm to deeprig9
quote:
Mortgage rates aren't tied to the federal funds rate (aka "the fed"). They are tied to the yield of the 10 yr Treasury Note.
Sort of? They follow the 10yr note but they aren't tied to it. They are tied to the MBS (which competes with the 10yr note for investors), but it's just easier to say (and understand) the 10yr note.
LINK
Especially because bond rates are inverse of mortgage rates (and thus the 10-year Treasury note).
MBS vs 10 yr Treasury Note
MBS vs 30 year mortgage
Similarly, while the FedFund rate primarily impacts shorter-term loans, there is still an influence on the longer-term mortgages (it's just smaller) and thus it's just easier to say (and understand) that the FedFund impacts mortgages (especially when you consider the impact on mortgage payments there will be for many from the increase on credit card interest).
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