Why Fed Rate Cuts Aren’t Making Mortgages Cheaper

Federal Reserve interest rate decision can affect the cost of mortgages. But that link from the Fed to your monthly payment isn’t direct. Fed decisions affect the investors demand for debt products like treasury bills and mortgage-backed securities. The shifting demand will, in turn, affect the rates Americans pay for new mortgages. Meanwhile, the Fed is reducing its holdings of debt, which it accrued during recent economic emergencies. That reduction in the Fed's assets, particularly mortgage-backed securities holdings, could keep upward pressure on mortgage rates. The upward pressure may keep rates elevated even as the Fed reduces the federal funds rate heading into 2025. Chapters: 01:13 Chapter 1 - Mortgage rates 04:08 Chapter 2 - Treasury yields 05:56 Chapter 3 - Quantitative tightening 07:43 Chapter 4 - The outlook Produced, Shot and Edited by: Carlos Waters Additional Camera: Nathaniel Lee, Charlotte Morabito Senior Producer: Shawn Baldwin Graphics: Christina Locopo Additional footage: Federal Reserve, Getty Images Additional sources: BNL Appraisal, The Brookings Institution, Federal Housing Finance Agency, Federal Reserve Bank of Dallas, Federal Reserve Bank of Kansas City, Federal Reserve Bank of St. Louis, ICE Mortgage Technology, Mortgage Bankers Association, Peter G. Peterson Foundation, SmartAsset » Subscribe to CNBC: https://cnb.cx/SubscribeCNBC » Subscribe to CNBC TV: https://cnb.cx/SubscribeCNBCtelevision About CNBC: From 'Wall Street' to 'Main Street' to award winning original documentaries and Reality TV series, CNBC has you covered. Experience special sneak peeks of your favorite shows, exclusive video and more. Want to earn more money at work? Take CNBC’s new online course How to Negotiate a Higher Salary. Expert instructors will teach you the skills you need to get a bigger paycheck, including how to prepare and build your confidence, what to do and say, and how to craft a counteroffer: https://cnb.cx/4fB26Ru Connect with CNBC News Online Get the latest news: https://www.cnbc.com/ Follow CNBC on LinkedIn: https://cnb.cx/LinkedInCNBC Follow CNBC News on Instagram: https://cnb.cx/InstagramCNBC Follow CNBC News on Facebook: https://cnb.cx/LikeCNBC Follow CNBC on Threads: https://cnb.cx/threads Follow CNBC News on X: https://cnb.cx/FollowCNBC Follow CNBC on WhatsApp: https://cnb.cx/WhatsAppCNBC #CNBC #fed #interestrates Why Fed Rate Cuts Aren’t Making Mortgages Cheaper