U.S. mortgage rates are staying high, and the Federal Reserve can do little about it

Article excerpt

Mortgage rates remain stubbornly elevated even as the Federal Reserve signals readiness to cut interest rates, leaving would-be homebuyers facing continued affordability headwinds. The culprit isn't the Fed's policy rate but rather investors' expectations about future inflation, which drive the longer-term bond yields that directly determine what banks charge on 30-year loans. This disconnect means the central bank's traditional levers have limited power over the mortgage market, a frustration for policymakers hoping to ease housing costs. Economists say the persistent gap between Fed policy and mortgage pricing reflects broader market forces that ultimately determine whether homeownership remains accessible.