Why you understand mortgage rates better than many commentators do

Just over a week ago the Federal Reserve increased short-term interest rates and I explained in What the Fed’s rate increase mean for mortgage rates that the 30-year fixed rate mortgage rate was not affected by the Fed Funds rate but by the yield on the US 10 year Treasury.

If you read my article and were a journalist you would not have written articles I saw this week with headlines such as “Defying Fed hike, 30-year mortgage rate slips” or “30-year mortgage rate drops in spite of Fed hike”.

The Huffington Post,  quoting this The Effect of Fed Funds Rate Hikes on Consumer Borrowing Costs article from the New York Fed, said in its blog post:
“New York Fed researchers reckon that past Fed decisions to increase rates mostly affected short-term loans and securities, such as adjustable-rate mortgages where the interest rate is fixed for the first year. Loans of longer duration, such as 30-year home loans, were less affected.”

Keep reading Oliver Reports and you will be knowledgeable about what actually influences the real estate market, both locally and nationally. The right-hand side of the home page has links by to collections of articles by category I have written.

If you – or somebody you know – are considering buying or selling a home and have questions about the market and/or current home prices, feel free to contact me on 617.834.8205 or [email protected].

Read How should I choose the broker to sell my house?

Andrew Oliver is a Realtor with Harborside Sotheby’s International Realty. Each Office Is Independently Owned and Operated

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