Mortgages and Fed the next move
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Mortgages and Fed the next move
The Federal Reserve held interest rates steady at the end of its two-day meeting.
The Fed’s decision to remain on the sidelines still has far-reaching implications for almost all forms of borrowing as well as the returns you earn on your savings.
From credit cards and mortgage rates to auto loans and savings accounts, here’s a look at how your wallet is impacted.
The average for a 30-year fixed mortgage is 6.83% today, up 0.07% over the last week. The average rate for a 15-year fixed mortgage is 6.01%, which is an increase of 0.09% from the same time last week.
CNBC Fed Survey:
Respondents confident Fed will cut interest rates this year.
The Federal Reserve announced Wednesday it will leave interest rates unchanged amid higher prices from President Donald Trump’s tariff policies and weakening economic growth.
Federal Reserve Chair Jerome Powell “is sitting on a hornet’s nest of headaches — in that situation, he is going to hold tight,” said Brian Bethune, an economist and professor at Boston College.
Largely because of mixed economic signals and the United States’ changing tariff agenda, uncertainty is “off the charts,” Bethune said. “We are as close to a ‘black swan’ policy shock as you can get.”
With the Fed holding rates steady for now, consumers struggling under the weight of high prices and high borrowing costs aren’t getting much relief, experts say.
The federal funds rate sets what banks charge each other for overnight lending, but also has a domino effect on almost all of the borrowing and savings rates Americans see every day.
When the Fed hiked rates in 2022 and 2023, the interest rates on most consumer loans quickly followed suit. Even though the central bank lowered its benchmark rate three times in 2024, those consumer rates are still elevated, and are mostly staying high, for now.
Mortgages
Mortgage rates don’t directly track the Fed, but are largely tied to Treasury yields and the economy. As a result, uncertainty over tariffs and worries about a possible recession are dragging those rates down slightly.
The average rate for a 30-year, fixed-rate mortgage is 6.91% as of May 6, while the 15-year, fixed-rate is 6.22%, according to Mortgage News Daily.
But for potential home buyers, that’s not enough of a decline to give the housing market a boost. “Many borrowers (Potential Sellers) are reluctant to take on a loan (mortgage) at today’s rates, particularly if they currently have a loan at a significantly lower rate,”
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