How does the Federal Reserve's policy affect mortgage rates in 2025?
How does the Federal Reserve's policy affect mortgage rates in 2025?
The Federal Reserve’s policy directly impacts mortgage rates by adjusting the federal funds rate, which influences the overall cost of borrowing. In 2025, if the Fed raises rates to control inflation, mortgage rates could remain higher, making home loans more expensive. Conversely, if inflation stabilizes, the Fed may lower rates, which could ease mortgage affordability. Homebuyers and refinancers will need to closely monitor the Fed’s decisions to gauge potential changes in rates.