Are Mortgage Rates Settling Into A New Range?

Longer term mortgage rates dipped a little this week and are looking a little less volatile than earlier in the year. 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% effective today and said yesterday 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 so far in 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 due to the banking crisis in March. They seem to now be making better efforts to reduce the treasury securities in accordance with the plan, but overall balance sheet assets are still much higher than two months ago.

(dynamic charts with current data)

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