Mortgage rates do not move directly with the Federal Reserve.

One of the markets I watch closely is the 10-year U.S. Treasury yield.

Why?

Mortgage-backed securities compete with Treasury bonds for investor money.

When Treasury yields rise, investors normally demand higher returns from mortgages too. That can push mortgage rates higher.

When Treasury yields fall, mortgage rates often have room to improve.

They do not move exactly together every day, but the relationship is important.

This is why mortgage rates can sometimes rise even when the Federal Reserve does nothing.

When you hear someone say:

“The Fed didn’t raise rates, so why did mortgages go up?”

The bond market may be the reason.

Understanding mortgage rates means looking beyond the Fed.

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