"The average rate on a 30-year fixed-rate mortgage was at 5.87% APR in the week ending Feb. 26, according to rates provided to NerdWallet by Zillow. Yes, this is modestly higher week-over-week, but this still has us (along with most everyone else reporting on mortgage rates) at the lowest level since September 2022."
"The Federal Reserve doesn't set mortgage rates, but Fed decisions and the overall economic environment are major factors. These influence stock and bond markets, and bond markets in particular are key to mortgage rates."
"The primary mortgage market is consumers taking out home loans. The secondary market is what happens next: Lenders generally sell the loans, using that income to make new loans. The biggest buyers of those loans are government-sponsored enterprises Fannie Mae and Freddie Mac, which buy conforming, conventional mortgages."
Mortgage rates have declined to 5.87% APR for 30-year fixed-rate mortgages, marking the lowest level since September 2022. While this benefits homeowners seeking to refinance, prospective buyers face challenges from limited housing inventory and increased competition. Despite economic indicators suggesting rates should rise, they continue falling due to Treasury yield dynamics. The mortgage market operates through primary and secondary markets, where lenders sell loans to government-sponsored enterprises like Fannie Mae and Freddie Mac, which bundle them into mortgage-backed securities. Understanding bond market relationships and Treasury yields is essential to comprehending current rate movements.
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