When it comes to determining where long-term mortgage rates are headed, forget the Fed Funds rate that we hear about when the media says "the Feds are cutting (or raising) rates". Conventional Mortgage rates move lock-step with the ten year Treasury bond rate. You can check the rate online using the ticker symbol "TNX". By the way, the ten-year rate is up 0.1870 to 3.83% today.
Follow this link to view a chart that shows the correlation between the two, and demonstrates how the Fed Fund rate doesn't affect mortgage rates. http://www.hsh.com/images/forgetfed.gif
But no one is saying that the Fed Fund rate doesn't matter. Short term borrowing and savings rates are strongly influenced by the Fed Fund rate.
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