Consider this: In 2024, about 60% of owner-occupied homes had mortgages and a little more than 30% of total annual household spending was devoted to housing. Is it any wonder that mortgage rates are one of the most watched and reported interest rates in the U.S. financial system? But what determines mortgage rates? Because home mortgages are long-term (often 30-year) loans, bankers look at a wide variety of factors, including what they believe economic conditions and expectations will be during the duration of the loan, when they set the interest rate. This new article explains how mortgage interest rates are connected to many parts of the economy, including mortgage-backed securities, Treasury notes and long-term expectations — and why the connection between monetary policy and mortgage rates is weaker than it is with short-term rates #TeachEcon#