After weeks of downward momentum, mortgage rates changed direction and were up this week. The 30 Year Fixed Rate Mortgage was at 6.39% and the 15 Year Fixed Rate Mortgage was at 5.76% in Freddie Mac’s Weekly Survey released today. See current survey below with its most recent assessment of the mortgage rate landscape.
(dynamic charts with current data)
The Fed raised the Fed Funds Rate by 0.25% in March and said it will continue tapering its balance sheet as a major part of its quantitative tightening (QT) plan. The plan is to reduce US Treasury securities held by the Fed by $60 billion per month and mortgages held by the Fed by $35 billion per month. In 2022 they did not stick to the stated Fed tapering plan and after the first quarter of 2023 they are not even close to the targeted mortgage security reductions in the plan. The plan had the balance sheet below $8.4 trillion at the end of 2022 and below $7.3 trillion at the end of 2023. Fed assets soared recently causing much uncertainty about how the latest efforts to bailout the banking system will impact its already weak QT implementation, as well as what will be the longer term effect on inflation and interest rates.
With the Fed you must watch what they say and what they do, but those are commonly different things. Fed forecasts, projections, and targets that look out longer than days or weeks, have proven to be commonly inaccurate and sometimes disingenuous.
(dynamic charts with current data)
