The Federal Reserve just raised interest rates for the first time since 2023. Here's how mortgage rates may respond.
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TL;DR
- Average 30-year fixed mortgage rates have reached 7.43% as of mid-September, increasing affordability strain for homebuyers.
- The Federal Reserve raised its benchmark interest rate by 25 basis points, the first increase since 2023, to a range of 3.75% to 4.00%.
- Mortgage rates are influenced more by the 10-year Treasury yield and market expectations than directly by the federal funds rate.
- Future mortgage rate movements will depend on the Fed's guidance on subsequent rate hikes and upcoming economic data.
- Homebuyers should focus on shopping for lenders, potentially locking in rates, and strengthening their financial standing.
- Improving credit, reducing debt, and increasing down payments can help secure better mortgage terms.