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If you are following rates and markets, you might be wondering: Why have mortgage rates gone up, when the Federal Reserve is lowering rates? The answer to that question is that the Federal Reserve controls only the very shortest-term rate – the overnight rate. Think of that as the rate that moves up and down immediately with Fed decisions. Mortgage rates, on the other hand, are typically the longest-term rate, 15-30 years. Long term rates move more on what the Fed is going to do in the long-term future, not what the Fed is doing today. The recent movement upward of the long-term rates reflect the markets uncertainty about inflation, and about how the incoming administration policy is going to impact the overall economy. We expect this reaction to uncertainty will settle down, and long-term rates will come down gradually throughout 2025. This will be beneficial to home buyers as we soon enter the 2025 buying season. As always, if I can answer any questions you have feel free to
contact me at krodeghier@ffsbweb.com.
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