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The Fed Raised Rates Today
What Does It Mean for Mortgage Rates?
The Federal Reserve raised its benchmark target rate by 0.25% target rate by 0.25 percentage point to 3.75% - 4.00% this week. But here's something many people don't realize:
The Fed does not directly set mortgage rates.
Mortgage rates are driven more by the bond market, including the 10-year Treasury, along with inflation and expectations about where the economy is headed.
That's why mortgage rates don't necessarily move up or down when the Fed changes its rate and sometimes they can even move in the opposite direction.
What does this mean for real estate?
The Treasure Valley market continues to move, with Ada & Canyon County home prices up from a year ago and inventory still relatively tight.
For buyers, rather than waiting for the Fed to "lower mortgage rates," watch actual mortgage rates and your monthly payment.
For sellers, rates matter, but so do inventory, competition, condition and pricing.
Bottom line: Don't make a buying or selling decision based solely on what the Fed does. What matters more is the mortgage rate available today and what's happening in your specific part of the Treasure Valley.
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