Mortgage Rates Are Volatile Again, Thanks to the Fed

The story of real estate in Greenville—and across the country—is often shaped by a single number: the mortgage rate. That figure doesn’t live in a vacuum. It moves with the economy, reacts to government policy, and is influenced by global markets. And lately, it’s been swinging back and forth at a pace that leaves both buyers and sellers wondering what’s next.

In a recent episode of Selling Greenville, the discussion dove deep into how the Federal Reserve’s decisions, statements, and subtle hints send ripples through bond markets and, in turn, reshape mortgage rates. What unfolded last week in particular was one of the most volatile stretches the housing market has seen in months.

Mortgage Rates Are Volatile Again

The heart of the episode zeroed in on why mortgage rates are volatile again. The simplest way to track mortgage movement is by watching the 10-year Treasury yield. While not perfectly aligned, the 10-year and 30-year fixed mortgage rates are closely correlated.

Back in 2019, the “spread” between the two was less than 200 basis points (about 2%). That meant that when the 10-year hovered at 2.5%, mortgage rates sat comfortably below 4.5%. Today, that spread is wider—often closer to 300 basis points. With the 10-year near 4%, mortgage rates have hovered in the high sixes or even crested above 7%.

The episode explained this dance clearly: the 10-year yield rises, mortgage rates rise. The yield falls, mortgage rates dip. But unlike in previous years, the spread is amplifying those movements, adding a new layer of volatility that homebuyers and sellers must contend with.

A Week of Whiplash in the Markets

Last week offered a perfect case study in how quickly things can shift.

• Tuesday’s Job Openings Data: Numbers came in higher than expected, signaling a stronger economy. That meant inflation might remain stubborn, which nudged the 10-year yield upward—briefly.

• Wednesday’s Federal Open Market Committee Statement: The Fed didn’t cut or raise rates, but their words mattered. The statement sounded “hawkish,” suggesting rates weren’t coming down anytime soon. The 10-year yield ticked up again.

• Chairman Jerome Powell’s Remarks: Markets initially braced for the worst, but Powell balanced his hawkish tone with caveats. If the labor market cooled, cuts could come sooner. Importantly, he did not put rate hikes back on the table, softening fears of aggressive tightening. The market responded by sending yields—and mortgage rates—lower.

• Friday’s Employment Report: A blowout. Job growth in January, along with upward revisions to November and December, showed a labor market far stronger than anticipated. That suggested inflationary pressures remain, and bond markets swung higher once more.

By the end of the week, mortgage rates had bounced from nearly 6.6% back up above 7%. It was an almost dizzying shift for anyone tracking the numbers daily.

How the Fed Shapes Perception

One theme came through loud and clear: the Federal Reserve doesn’t just move rates—it moves expectations.

Statements from Fed members, interviews on television, even offhand remarks—all are calculated. They guide markets by influencing how investors interpret the Fed’s stance. Sometimes, multiple officials will line up with similar “hawkish” tones to push bond yields higher, which then keeps mortgage rates elevated without the Fed having to officially raise the federal funds rate.

This week highlighted that dynamic in action. Markets reacted not only to official announcements but to the nuance of Powell’s words and the ripple effect of televised interviews.

What It Means for Buyers and Sellers

For the average Greenville family considering a move, the difference between a 6.5% and a 7% mortgage rate isn’t just academic—it changes affordability. On a $400,000 home, it can mean hundreds of dollars a month in payments.

But the podcast reminded listeners that national averages don’t always tell the whole story. Many lenders are still offering rates below 7%, especially with buy-down programs. Some clients are even locking in at 6.5% or lower. On the other hand, some may pay more depending on credit profiles and loan structures.

The volatility also underscores the importance of timing. A buyer who checked rates mid-week might have seen affordability improve by thousands of dollars annually, only to lose those gains by the weekend. It’s a reminder that staying connected to a knowledgeable professional who watches these movements in real time can make a major difference.

A Rare Glimpse Into Fed Thinking

The episode also highlighted an unusual moment: Jerome Powell’s extended interview on 60 Minutes. While careful with his language, Powell admitted that a March rate cut was “extremely unlikely.” Instead, he pointed toward the middle of the year—leaving open whether that meant the second or third quarter.

For casual observers, that might not have been news. But for markets, it was a confirmation that dashed any lingering hopes of an early rate cut. The ripple effect was immediate: bond markets in the U.S. and even overseas shifted within hours.

Powell’s approach—confident, measured, but deliberately vague—shows the balancing act the Fed plays. Too much optimism could overheat the market. Too much pessimism could cause panic. And so the dance continues.

Looking Ahead

So, where does this leave Greenville buyers, sellers, and real estate professionals?

• Mortgage rates are hovering near 7%, but with swings in both directions.

• The Fed is carefully calibrating its message, keeping cuts on the horizon but not imminent.

• A wide spread between the 10-year Treasury and mortgage rates means volatility will remain a factor for the foreseeable future.

While no one can predict exactly where rates will land in the coming months, the best bet is to stay informed and prepared. If economic data weakens—especially around jobs—rates could soften. If the labor market stays hot, higher-for-longer becomes the reality.

Watch or Listen to the Selling Greenville Podcast

Subscribe to the Selling Greenville podcast for real-time insights, bold perspectives, and unfiltered takes on the Upstate housing scene. Whether you’re buying, selling, or simply watching the market unfold—this is where Greenville goes to stay informed.

Bottom Line

Mortgage rates are volatile again, thanks to the Fed, and that volatility isn’t likely to fade anytime soon. Each data release, each Fed comment, and each shift in bond markets can change the outlook overnight. For Greenville’s buyers and sellers, the key takeaway is to stay flexible, watch the market closely, and partner with professionals who live and breathe these numbers every day.

While uncertainty can feel unsettling, it also creates opportunities. For those ready to move when the moment is right, staying educated is the best strategy in today’s shifting housing landscape.

Ien Araneta

Journal & Podcast Editor | Selling Greenville