Why are mortgage rates falling?
Marketplace
Marketplace
4.6 • 8.5K Ratings
🗓️ 8 December 2022
⏱️ 27 minutes
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Summary
Mortgage rates usually move in tandem with the interest rate set by the Federal Reserve. But mortgage rates have dipped recently while the rate set by the Fed has been climbing. Why? The answer lies in the market for mortgage bonds. Plus, the state of the oil economy, the job gains workers with disabilities are making, and the growing need to crowdfund for basic necessities.
Transcript
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| 0:00.0 | On the program today, interest rates and oil and what they can tell us. |
| 0:08.2 | From American public media, this is Marketplace. |
| 0:19.7 | In Los Angeles, I'm Kyle Rizdole. |
| 0:21.5 | It is Wednesday, today, the 7th of December. |
| 0:24.1 | Good as always to have you along, everybody. |
| 0:27.1 | We begin the program today with a tale of two interest rates. |
| 0:31.0 | The first is the federal funds rate. |
| 0:33.4 | That's the one that gets all the attention, right? |
| 0:35.0 | The rate that the federal open market committee sets. |
| 0:37.6 | And you know, because you listen to this program, that that rate has been going up since March. |
| 0:42.9 | The target is now between 3.75 and 4%. |
| 0:47.6 | It's going up again next week, exact increase TBD. |
| 0:52.1 | The second rate, the average on a 30 year fixed rate mortgage, which typically moves pretty |
| 0:56.8 | much in tandem with what the Fed is doing. |
| 1:00.2 | The keyword there though is typically because over the last month, the average rate on a 30 |
| 1:05.0 | year fixed mortgage has actually dropped from 7.16% all the way down, relatively speaking, |
| 1:11.9 | to 6.4%. |
| 1:13.2 | That's according to the Mortgage Bankers Association. |
| 1:17.3 | And I can hear you now saying, what gives with that? |
| 1:21.3 | Marketplace MetLeaven gets us going. |
| 1:23.6 | Little multiple choice quiz for you. |
| 1:25.7 | If the Fed raises interest rates, mortgage rates will A, go up, B, go down, or C. |
... |
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