As the new week starts, mortgage rates are hovering just above 7% for a top-tier conventional 30-year fixed scenario, maintaining the levels seen last Friday, marking the highest rates in recent weeks. The spike in rates last Thursday was primarily due to robust economic data, a crucial factor impacting rate movements.
The Federal Reserve (Fed) closely scrutinizes such data to decide whether to keep rates steady following the fastest rate-hiking pace since the early 1980s. While the Fed Funds Rate doesn’t directly impact mortgage rates, expectations for its future changes are closely correlated. Essentially, a “friendly” Fed policy aligning with weak economic data tends to result in lower interest rates, while a “unfriendly” Fed policy corresponding with strong data tends to drive rates up.
For potential homebuyers, it’s essential to keep an eye on economic indicators and understand the implications of Fed policies on mortgage rates for better financial planning.