Mortgage & Economic Market Indicators

30-year fixed mortgage rate — national average

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.

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Federal funds target range

This is the rate the Federal Reserve sets for overnight lending between banks. It moves 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.

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10-Year Treasury yield

If you only watch one number to see where mortgage rates are headed, watch this one. Mortgage bonds compete with Treasuries for the same investors, so when the 10-year yield climbs, mortgage rates usually follow within days. Mortgage rates run above it, and the size of that gap changes with market conditions.

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Prime rate

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.

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Inflation — CPI, year over year

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.

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U.S. unemployment rate

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.

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