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The interest rate on a home loan. In the U.S., the 30-year fixed mortgage rate roughly tracks the 10-year Treasury yield (plus a spread) — not the Fed's short-term rate directly — which is why mortgages can stay high even when the Fed pauses.
Why It Matters
The mortgage rate sets the monthly payment, so it's the single biggest driver of housing affordability and of whether people buy, sell, or stay put. Because it follows long-term bond yields rather than the fed funds rate, it can stay elevated even after the Fed stops hiking — keeping the housing market frozen.
Key Points
- The interest rate on a home loan.
- Tracks the 10-year Treasury yield, not the Fed funds rate directly.
- Drives the monthly payment — and the lock-in effect.
Related Terms
Common Questions
The interest rate on a home loan. In the U.S., the 30-year fixed mortgage rate roughly tracks the 10-year Treasury yield (plus a spread) — not the Fed's short-term rate directly — which is why mortgages can stay high even when the Fed pauses. The mortgage rate sets the monthly payment, so it's the single biggest driver of housing affordability and of whether people buy, sell, or stay put. Because it follows long-term bond yields rather than the fed funds rate, it can stay elevated even after the Fed stops hiking — keeping the housing market frozen.
The mortgage rate sets the monthly payment, so it's the single biggest driver of housing affordability and of whether people buy, sell, or stay put. Because it follows long-term bond yields rather than the fed funds rate, it can stay elevated even after the Fed stops hiking — keeping the housing market frozen.
The interest rate on a home loan.
Tracks the 10-year Treasury yield, not the Fed funds rate directly.
Drives the monthly payment — and the lock-in effect.