151: The Math Behind Mortgage Rates and Why They're Staying Put w/Redfin’s Chen Zhao
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The Fed’s new “neutral interest rate” could mean pricier mortgages, less cash flow, and higher home prices for longer. After the great financial crisis, interest rates) were kept in check, slowly sliding down for over a decade. But, since the pandemic, things have gone the opposite way. Mortgage rates)** have hit multi-decade highs**, bond yields) have crossed new territory, and we could be far from things returning to “normal.”

If you want to know the math behind the mortgage rates and understand what the Fed) does (and doesn’t) control in a high-rate world, Redfin’s Chen Zhao can break it down for you. In this episode, Chen goes through the economic indicators tied to mortgage rates, how bond yields affect banks' lending power, why the ten-year treasury is at a historic high, and the Fed’s newest “neutral interest rate.”

We’ll also get into the potential effect of next year’s presidential election on mortgage rates and the** housing market **and what to look for to gauge where we’re headed. If you want to know where interest rates will go, Chen details the roadmap in this episode.

In This Episode We Cover:

**The math behind mortgage rates **and what causes them to rise and fall

The Fed’s new “neutral interest rate” and why mortgage rates could stay where they are for a LONG time

Bond spreads, how they** affect mortgage rates**, and why they’ve taken a massive leap

Reaching **economic equilibrium **and how the Fed plans to keep **unemployment **and **inflation **down

The **2024 **presidential election) and whether Democrats or Republicans could help/hurt the housing market

And So Much More!

Links from the Show

Find an Agent)

Find a Lender)

BiggerPockets Forums)

BiggerPockets Agent)

BiggerPockets Bootcamps)

Join BiggerPockets for FREE)

On The Market)

Join the Future of Real Estate Investing with Fundrise)

Connect with Other Investors in the “On The Market” Forums)

Subscribe to The “On The Market” YouTube Channel)

Dave's BiggerPockets Profile)

Dave's Instagram)

Henry's BiggerPockets Profile)

Henry's Instagram)

The Federal Reserve is Suddenly Doubling Its Forecast For Growth—But Will They Keep Hiking Rates?)

Mortgage Rates Reach the Highest Point in 20 Years—How Much Higher Will They Go?)

Connect with Chen:

Economists Corner)

Chen's LinkedIn)

Research)

Click here to listen to the full episode: https://www.biggerpockets.com/blog/on-the-market-151

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