What Moves Mortgage rates?

With all of the talk about the lowering of prime this week, there has been some discussion about how that does or does not affect interest rates. Here is a very well written article that you may want to print and read. It has an excellent description of all of the factors that can move mortgae rates up or down.

As the article explains, the Fed Fund rate is the rate for very short term money. Mortgages fall into the long term category.

While I suggest you read the whole article, it gets boiled down to the following. These are what control what mortgage rates are:

1. Supply
2. Demand
3. Competition for Money
4. Inflation
5. The Economy
6. Expecations
7. and You

Here's the link

http://library.hsh.com/read_article-hsh.asp?row_id=85