{"id":21136,"date":"2025-09-26T01:41:36","date_gmt":"2025-09-26T01:41:36","guid":{"rendered":"https:\/\/finderica.com\/?p=21136"},"modified":"2025-09-26T01:41:36","modified_gmt":"2025-09-26T01:41:36","slug":"weekly-mortgage-rates-are-up-but-market-optimism-persists","status":"publish","type":"post","link":"https:\/\/finderica.com\/?p=21136","title":{"rendered":"Weekly Mortgage Rates Are Up, But Market Optimism Persists"},"content":{"rendered":"
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The average rate on the 30-year fixed-rate mortgage grew two basis points to 6.35% in the week ending Sept. 25, according to rates provided to SS by Zillow. A basis point is one one-hundredth of a percentage point. <\/span><\/p>\n<\/div>\n

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This is quite the change-up from the previous two weeks, which saw double digit basis point drops ahead of the Federal Reserve\u2019s September meeting. <\/span><\/p>\n<\/div>\n

The Fed cut the federal funds rate, but mortgage rates are up \u2014 what gives?<\/span><\/h2>\n
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While the Fed <\/span>doesn\u2019t directly set mortgage rates<\/span><\/span>, APRs will typically move in the direction that lenders expect the federal funds rate to follow. Mortgage rates <\/span>dropped last week<\/span><\/span> as lenders were confident that the Federal Reserve would vote to lower the federal funds rate. <\/span><\/p>\n<\/div>\n

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In fact, the average 30-year APR dipped to just above 6% on September 16, the day before the decision was announced \u2014 a level it hasn\u2019t reached in nearly a year. <\/span><\/p>\n<\/div>\n

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And, just as predicted, the Fed cut rates by 25 basis points. Hooray! Except, wait, <\/span>r<\/span>ates are back up again<\/span><\/span>. Why are lenders hiking mortgage rates up if the Fed did exactly as expected?<\/span><\/p>\n<\/div>\n

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Mortgage rates are affected by a wide range of economic factors, with lenders responding retroactively to new reports and looking ahead to expected data. In the case of the Fed meeting, it was never likely that rates were going to come down in the immediate aftermath because lenders had already lowered them in anticipation of the committee\u2019s decision. <\/span><\/p>\n<\/div>\n

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Mortgage rates are now trending back up largely because the <\/span>10-year treasury bond yield<\/span><\/span> has been on the rise even after the Fed\u2019s cut. While the direction of the federal funds rate can influence mortgage rates, bond yields chart a clearer path.<\/span><\/p>\n<\/div>\n

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Treasury bonds are considered a more secure investment than stocks and other higher-risk financial products because they\u2019re backed by the government. A higher yield means that bond prices are falling, which happens when investors are confident in the economy (including the real estate market) and aren\u2019t turning to treasury bonds as a safe bet. <\/span><\/p>\n<\/div>\n

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This is where we get into a bit of an economic logic problem. When mortgage rates are expected to fall, investors believe the market will perform better because more people will be buying homes. This confidence in the economy can drive bond yields up, which pushes mortgage rates up. Nobody said it was a perfect system. <\/span><\/p>\n<\/div>\n

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