I have been getting this question steadily all month, so let’s break it down.
The fed funds rate is the prime interest rate and the rate the central banks charge each other for borrowing money overnight. This is done in an effort to try and hedge against/minimize inflation. Mortgage rates, however, are tied to the Fannie May 10 year bond, not the prime interest rate. The prime interest rate is what home equity lines of credit (usually prime rate plus a margin) and credit cards (usually prime rate plus a margin) are based on.
Mortgage rates tend to take direction from some of these inflationary changes, as well as current political and monetary events both domestically and internationally. All of these various factors have different impacts and weights on the mortgage market. While the prime interest rate and mortgage interest rates do behave independently and are often correlated, they sometimes are inverse functions of each other.
In addition to the above, all of the various reports such as GDP, Consumer Price Index, jobs report, etc, have different knee-jerk impacts on the market which is why rates are changing several times per day.
If you have any further questions about this or the home buying process, feel free to give me call or send me a text at (760) 835-5663, I would be happy to speak with you!