05Mar2008
Dan Green
Author
Dan Green
Filed Under
Mortgage Rates

5 Things That Don’t Control Mortgage Rates

Mortgage rates and markets change constantly. Stay 100% current by taking The Mortgage Reports by email each day. Click here to get free email alerts, or subscribe to the RSS feed in your browser.

Mortgage rates are controlled by the price of mortgage bonds (and maybe Chuck Norris)This is a short list of things that don't control mortgage rates:

  1. 10-Year Treasury Note
    The image at right is evidence -- even as treasuries were improving yesterday, we can plainly see that mortgage rates were sucking eggs.  Green means better rates; red means worse rates.

  2. The Fed Funds Rate
    The Federal Reserve's benchmark lending rate is an overnight rate; mortgage rates are long-term rates.  If the two were connected, mortgage rates would be much lower today and this graph would look different.

  3. Ben Bernanke
    See above.  Ben Bernanke is the Chairman of the Federal Reserve, the group that sets the Fed Funds Rate. 

  4. The Fictional 10-Year Treasury Bond
    Not only is there no such product -- treasury bonds have durations greater than 10 years -- but check out Paragraph #10.  0-for-2.

  5. Chuck Norris
    Although, for as much as mortgage markets fear inflation, they fear Chuck Norris even more.

The only thing that sets mortgage rates in the U.S. is the price of mortgage bonds.

Dan Green
Author
Dan Green

About the Author

Dan Green (NMLS #227607) is an active loan officer with Waterstone Mortgage. Email Dan ator call 513-443-2020.

Bonus: Click to get a free, no-obligation rate quote. I love to work with my readers!

Waterstone Mortgage is an Equal Housing Lender.
Looking for today's lowest mortgage rates?
Click For Your Free, No-Obligation Rate Quote
Want to check your program eligibility?
FHA, USDA, Conventional and HARP : Start Here
Get a Free Mortgage Rate Quote