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Mortgage & Economic Market Indicators

NMLS #2560393Licensed NJPAFL

Mortgage rates are influenced by financial markets, inflation, employment, Federal Reserve policy and investor expectations. This page tracks several of the economic indicators that can help explain why mortgage rates move.

01Current readings

We use Freddie Mac's survey and official Federal Reserve and Bureau of Labor Statistics data distributed by FRED, the Federal Reserve Bank of St. Louis. Each reading shows its observation date or month and when we last checked it. These are published observations, not live trading quotes; releases can lag and be revised.

30-year fixed mortgage rate — national average

7.03%

Published

This is Freddie Mac's weekly survey of what lenders across the country are charging on a 30-year fixed conventional loan. It's the number the news quotes, and it's a good read on direction. But it's an average of other people's loans, not yours — it doesn't include points or fees, and your own rate depends on your credit, down payment, the property and the loan program.

A national market benchmark. It is not an Ai Remco rate, quote, APR or offer to lend.

Last checked:
Sep 28, 10:46 AM ET

Weekly national 30-year fixed-rate mortgage average; not an APR or individual loan quote.

Federal funds target range

3.75% – 4.00%

As of

This is the target range the Federal Open Market Committee sets for overnight federal funds lending. It influences credit cards, home equity lines and other short-term borrowing pretty directly. Mortgages are a different story: the Fed doesn't set mortgage rates, and they don't always follow a Fed cut, because they track long-term bond yields instead.

Last checked:
Sep 28, 10:46 AM ET

Percent. Target range: FRED series DFEDTARL and DFEDTARU, matched to the same observation date.

10-Year Treasury yield

5.18%

As of

This is one useful reference for the bond market. Mortgage-backed securities compete with Treasuries for investors, so their yields often move in the same direction. The gap changes with market conditions, and a Treasury move does not predict the timing or size of a change in your mortgage quote.

Last checked:
Sep 28, 10:46 AM ET

Percent per year. Daily 10-year constant-maturity Treasury yield (DGS10); not a mortgage rate.

Prime rate

7.00%

As of

Banks set prime off the Fed's target, usually three percentage points above the top of the range. It matters most if you're looking at a home equity line of credit, because most HELOCs are priced as prime plus or minus a margin.

Last checked:
Sep 28, 10:46 AM ET

Percent per year. Bank prime loan rate (DPRIME). Banks set prime; it is not the federal funds rate.

Inflation — CPI, year over year

3.4%

Data for

Inflation is what bond investors worry about most. When prices are rising faster, they want a higher return to make up for it, and that pushes mortgage rates up. When inflation cools off, there's more room for rates to come down.

Last checked:
Sep 28, 10:46 AM ET

CPI-U, all items, U.S. city average, not seasonally adjusted (CPIAUCNS). Ai Remco calculates the 12-month percent change: (index / index one year earlier − 1) × 100, rounded to one decimal.

U.S. unemployment rate

4.1%

Data for

A strong job market usually keeps rates firm. When unemployment starts rising, investors expect the Fed to ease and money tends to move into bonds, which can bring mortgage rates down.

Last checked:
Sep 28, 10:46 AM ET

Percent of the civilian labor force, age 16 and older. Monthly U-3 unemployment rate, seasonally adjusted (UNRATE).

These are market reference figures, not a loan offer. None of them is an Ai Remco rate, quote, APR or commitment to lend. Your actual rate, APR and closing costs depend on your application, the property, the loan program and the lender's terms, and are disclosed on a Loan Estimate.

02Common questions

How these numbers connect to your rate

Why do mortgage rates move?

Mostly because of the bond market. Lenders sell most mortgages to investors as mortgage-backed securities, so the rate you're offered depends on what those investors will accept. They react to inflation, jobs reports, Federal Reserve policy and the 10-Year Treasury — which is why rates can change from one day to the next, and sometimes more than once in a day.

Does the Federal Reserve set mortgage rates?

No. The Federal Open Market Committee sets a target range for the federal funds rate. Lenders set mortgage rates, which are influenced by mortgage-backed securities, Treasury yields, inflation expectations and other market conditions. A Fed cut does not guarantee a lower mortgage rate.

Why does the 10-Year Treasury matter for mortgage rates?

Because investors treat mortgage bonds and 10-year Treasuries as competing places to put their money. Most 30-year mortgages are paid off or refinanced long before 30 years, so they get priced against the 10-year yield rather than a 30-year one. When that yield rises, mortgage rates usually rise with it.

What is the Freddie Mac mortgage rate?

It's a weekly national average from Freddie Mac's Primary Mortgage Market Survey, based on 30-year fixed conventional purchase loans for borrowers with excellent credit and a down payment large enough to avoid mortgage insurance. It comes out on Thursdays. It's useful for seeing the trend, but it isn't a quote — it leaves out points and fees, and your rate depends on your own file.

Numbers on a page only go so far. If you want to know what they mean for your own purchase or refinance, give me a call.

— Lawrence Higgins, MS, CFM owner of AI REMCO L.L.C. · Mortgage Loan Originator, NMLS #2530499

(732) 561-4292Send a question