> ## Content Index
> Fetch the complete content index at: https://www.mortgagemomradio.com/llms.txt
> Use this file to discover other available public pages before exploring further.

# The Fed Raised Rates Again — So Why Did Mortgage Rates Get Better That Day?
- URL: https://www.mortgagemomradio.com/the-fed-raised-rates-again-so-why-did-mortgage-rates-get-better-that-day/
- Published: 2023-02-01T21:00:00.000Z
- Updated: 2026-09-04T20:54:51.000Z
- Description: The Fed hiked a quarter point on February 1, 2023 and mortgage rates improved on the news. Debbie reads Powell’s statement in full, explains which loans the Fed actually controls, and why a smaller hike was the signal she had been waiting for since December.
- Author: Deborah Marcoux
- Tags: Podcast, Mortgage Mom Radio, #episode-backfill

Mortgage Mom Radio • “2/1/23 Fed Meeting - Increased Rates” • Live show from Wednesday, February 1, 2023 • 54 minutes • Hosted by Debbie Marcoux, NMLS #237926

The Federal Reserve raised its target rate by a quarter point on the afternoon of February 1, 2023 — and mortgage rates got *better* that day. Debbie reads Chairman Powell's opening statement in full so you hear the source instead of somebody's summary, then explains the part most people get wrong: credit cards, HELOCs and car loans are tied to the Fed, and 30-year mortgages are not. She also replays what she said at the December meeting, and explains why a smaller hike was exactly the signal she had been waiting for.

## Key takeaways

- **The step-down is the story, not the hike.** Three-quarters of a point at meeting after meeting through 2022, then a half point in December, and now a quarter point. Debbie's read: the Fed can see inflation turning, it is easing off deliberately, and there is a light at the end of the tunnel.
- **Powell's own numbers, as read on air:** the target range moved to **4.5–4.75%**; total PCE prices rose **5%** over the 12 months ending in December and core PCE rose **4.4%**; real GDP grew a below-trend **1%** last year; hiring averaged **247,000 jobs a month** over the prior three months with unemployment at a 50-year low.
- **Inflation peaked at 9.1% and was down to 7.1% by December.** Still far too high, but moving the right direction — and that is what let the Fed slow down.
- **The Fed does not set your mortgage rate.** HELOCs, credit cards, adjustable student loans, adjustable-rate mortgages and short-term car loans move with the Fed almost immediately — expect a higher minimum payment within about 30 days. A 30-year fixed mortgage tracks the bond market instead, which is why rates improved on hike day: investors moved money into longer-term, more stable places like mortgage-backed securities.
- **Where rates actually sat that day:** the 30-year fixed averaged around **3%** at the start of 2022, peaked above **7%** in November (the highest since 2002), and on February 1 was in the **low sixes** and could be bought down into the fives. Debbie called it a sweet spot.
- **Two groups should re-run their numbers now:** anyone who bought between June and November of 2022 (rates may be a point to a point and a half lower), and anyone carrying a home equity line taken out in 2021 or 2022 whose payment has nearly doubled as the Fed pushed the prime rate up.
- **Buyers get leverage that disappears when the crowd comes back.** Homes were sitting 30, 60, 90, even 100 days. That is when a seller entertains closing-cost credits, a rate buy-down, or a zero-down VA offer — and that leverage evaporates the moment everyone decides the market has turned.

## Chapters

- 01:00What today's show covers: the Fed decision, two hours old
- 06:30Reading Chairman Powell's February 1 statement in full
- 11:50The vote: target range to 4.5–4.75%
- 15:00What Powell actually said, in plain English
- 15:50Replay: December 2022, when hikes stepped down to a half point
- 20:20Why smaller increments are the good news
- 26:30What the hikes did to car loan rates
- 28:2030-year mortgage rates vs. the November peak
- 29:40Falling rates are already pulling buyers back out
- 32:20Which loans the Fed actually controls
- 33:40Why mortgage rates improved on the day of a hike
- 36:20Who benefits: buyers, and anyone who bought in mid-2022
- 38:00HELOCs taken in 2021–2022: check your payment
- 39:20Q&A: manufactured home loans on owner-owned land
- 43:20The Mortgage Mom Radio tools app
- 48:20Buyers: closing-cost credits are back on the table
- 52:00Wrap-up: a quarter point is a light at the end of the tunnel

## Questions answered on this show

### “Do you do manufactured home loans on a permanent foundation, on land the owner owns?”

Yes. The rules are not one lender's rules — they come from FHA, VA, Fannie Mae and Freddie Mac, so they apply across the board. The home has to be newer than the mid-1980s (Debbie believes 1986, and deferred to Carrie, her manufactured housing specialist, to correct her on air). It has to be at least a double-wide, not a single-wide. And it has to be permanently affixed to the foundation, with the HUD requirements met and the HUD tags in place so it has been converted from personal property to real property. If the land is yours and the home is permanently affixed, financing should be available. One rule most people don't know: **you cannot finance a manufactured home as an investment property.** You have to occupy it. The plan of buying a manufactured place by the river, renting it out in summer, and financing it as an investment doesn't work.

## This week's numbers (week of February 1, 2023 — averages, not quotes)

- Fed funds target range: **4.5–4.75%** after a quarter-point hike
- 30-year fixed mortgage: **low sixes**, and buyable down into the fives — against roughly **3%** at the start of 2022 and a November peak **above 7%**, the highest since 2002 (Freddie Mac data as read on air)
- Inflation: peaked at **9.1%**, down to **7.1%** as of December
- Auto loans, per Bankrate data read on air: 60-month new car **6.18%**, 48-month new car **6.17%**, 48-month used car **6.83%**, 36-month used car **6.49%**
- Home equity lines of credit: repricing upward with every Fed move, with the increase showing up in next month's minimum payment

*Your rate depends on FICO score, property type, loan balance, and loan purpose. These are national conforming averages for context, not a quote.*

### Find out what your numbers look like today

Call [844-935-3634](tel:8449353634) (844-WE-LEND-4), [start an application](https://www.mortgagemomradio.com/apply/), or run your own scenario with the [mortgage calculators](https://www.mortgagemomradio.com/tools/). Get the weekly rate rundown in the [newsletter](https://www.mortgagemomradio.com/newsletter/).

Full transcript (lightly edited for clarity) 

*Auto-generated captions cleaned for readability. Commercial breaks, licensing recitations and repeated housekeeping have been trimmed; licensing information appears at the bottom of this page.*

### What today's show covers

Welcome to Mortgage Mom Radio. I'm Debbie Marcoux, I'm the Mortgage Mom, and every week I come to you live on YouTube on Wednesdays to let you know what's going on in the market — the temperature that's out there, the current events, where interest rates are. Today we're talking about the Fed meeting that wrapped up about two hours ago. What does that meeting mean for you? What is the new increase in interest rates? What's going to happen with home buying?

The Federal Reserve announced about two hours ago that they increased interest rates by a quarter of a percent. We're going to talk about what that means for you, where you're going to feel it, and what it's going to do to mortgage interest rates — because it's probably not what you're going to expect to hear.

### Reading Powell's statement in full

The first thing I'm going to do is read the press conference — the transcript of Chair Powell's opening statement for February 1st, 2023 — so you can hear exactly what he said, and then we'll discuss what it means moving forward. I like for my listeners to have the full story, all the information, and the accurate information. Not somebody's interpretation in an article about what was said. We're going to interpret it our way, but I want you to have the real thing first.

*“Good afternoon and welcome. My colleagues and I understand the hardship that high inflation is causing, and we are strongly committed to bringing inflation back down to our 2% goal. Over the past year we have taken forceful actions to tighten the stance of monetary policy. We have covered a lot of ground, and the full effects of our rapid tightening so far are yet to be felt. Even so, we have more work to do. Price stability is the responsibility of the Federal Reserve and serves as the bedrock of our economy. Without price stability the economy does not work for anyone.*

*Today the FOMC raised our policy interest rate by 25 basis points. We continue to anticipate that ongoing increases will be appropriate in order to attain a stance of monetary policy that is sufficiently restrictive to return inflation to 2% over time. In addition, we are continuing the process of significantly reducing the size of our balance sheet.*

*The U.S. economy slowed significantly last year, with real GDP rising at a below-trend pace of 1%. Recent indicators point to modest growth of spending and production this quarter. Consumer spending appears to be expanding at a subdued pace, in part reflecting tighter financial conditions over the past year. Activity in the housing sector continues to weaken, largely reflecting higher mortgage rates. Higher interest rates and slower output growth also appear to be weighing on business fixed investment.*

*Despite the slowdown in growth, the labor market remains extremely tight, with the unemployment rate at a 50-year low, job vacancies still very high, and wage growth elevated. Job gains have been robust, with employment rising by an average of 247,000 jobs per month over the last three months. The labor market continues to be out of balance; labor demand substantially exceeds the supply of available workers.*

*Inflation remains well above our longer-run goal of 2%. Over the 12 months ending in December, total PCE prices rose 5%; excluding the volatile food and energy categories, core PCE prices rose 4.4%. The inflation data received over the past three months shows a welcome reduction in the monthly pace of increases, and while recent developments are encouraging, we will need substantially more evidence to be confident that inflation is on a sustained downward path. Although inflation has moderated recently, it remains too high. The longer the current bout of high inflation continues, the greater the chance that expectations of higher inflation will become entrenched.*

*At today's meeting the committee raised the target range for the federal funds rate by 25 basis points, bringing the target range to 4.5 to 4.75%. With today's action we have raised interest rates by 4.5 percentage points over the past year. We are seeing the effects of our policy actions on demand in the most interest-sensitive sectors of the economy, particularly housing. It will take time, however, for the full effects of monetary restraint to be realized, especially on inflation.*

*Shifting to a slower pace will better allow the committee to assess the economy's progress toward our goals as we determine the extent of future increases that will be required. We will continue to make our decisions meeting by meeting, taking into account the totality of incoming data. Reducing inflation is likely to require a period of below-trend growth and some softening of labor market conditions. The historical record cautions strongly against prematurely loosening policy. We will stay the course until the job is done.”*

### What he was actually saying

So what was he saying in that statement? Number one: we are starting to see the effects of all of the increases they have done, which is fantastic. In essence, we have to stay the course, we have to keep increasing for a little bit longer, we have to see where it takes us — but they *are* seeing things come down.

Our highest point of inflation was 9.1%. As of December we had gotten down to 7.1%. That's a pretty good change very, very quickly — although they changed our interest rates very quickly too, and it kicked all of us in the butt.

And I want to remind everybody: all I can do is give you my honest opinion. It *is* an opinion. I'm not a financial advisor and I don't have a crystal ball. But I'm on top of it. This is my business, this is what I do for a living.

### Replay: what I said at the December meeting

I'm going to run a quick segment I did back in December at the last Federal Reserve increase, so you can see where my head was at, and then we'll tie it to today.

*“Today we are talking about the Federal Reserve increasing interest rates by a half of a percent. I know it's not fun to hear that they increased it by a half, but I'm actually very excited that it was only a half. For many meetings now they had been increasing that rate by three quarters of a percent every time. They meet every six weeks, so in six weeks I'll be on here talking about the next meeting. My hope is that because we went from a three-quarter point increase to a half point increase, the next time maybe we only see a quarter, and maybe the time after that they hold steady. That would be really great news — it means things are turning around, inflation is coming down, things are starting to normalize.”*

So back in December I was hoping we'd see the next meeting come in at only a quarter of a percent — which is exactly what they did today. That means they are starting to see significant changes. They don't want to take their foot off the pedal just yet; they will probably increase at least one or two more times. But they're doing it in smaller increments, which helps us avoid that slap across the face nobody was expecting.

Think about how fast this happened. People were buying homes at 3%. Car loans were at zero percent for five years. And then things changed almost overnight. So the fact that we're not going up three quarters of a point every meeting — only a half in December, only a quarter now — is positive news as far as I'm concerned. Everything I've read says they believe that by the end of 2023 they'll have their foot off the gas, and might even start reducing. That's not great news that rates went up and you'll feel it in your pocketbook. It's great news that the economy is showing the signs it needs to show.

### What the hikes did to car loans

Remember 2019, 2020, 2021? Aside from the car shortage — where we were all paying over sticker — the financing was fabulous. You could easily get 1.99%, 2.99%, or zero percent for three, four, five years. The Federal Reserve has raised rates dramatically since then, so here's the temperature check, according to Bankrate data: a 60-month new car loan is at 6.18%, a 48-month new car at 6.17% — so they're not giving you much of a break for financing it over less time. A 48-month used car is at 6.83%, and a 36-month used car at 6.49%. Substantially higher just to buy the car and finance it.

### Where mortgage rates actually stand

Now the 30-year fixed. As the Fed hiked through 2022, 30-year fixed rates shot up. At the start of last year the average 30-year fixed hovered around 3% according to Freddie Mac data. Now they're double that — however, they've come down from November's peak of over 7%, the highest level since 2002.

That's what I've been talking about for the last couple of weeks: we are in a fantastic sweet spot right now. We're down substantially from the peak. Rates are on average in the low sixes and can easily be bought down into the fives. If you've been thinking about looking at homes or refinancing, it's a great time.

And the fall in mortgage rates is already spurring demand from buyers — I said as soon as rates came down even a little, with homes sitting on the market, it would spur the pre-approval process and get people back on the street. USA Today reported exactly that this week, citing recent data from the Mortgage Bankers Association: mortgage rates at their lowest levels since September, and rate buy-downs on the rise as buyers cope with higher rates. So don't be behind the eight ball. Get your pre-approval started.

### Which loans the Fed actually controls

A lot of people assume that if the Federal Reserve raises its rate, then everything increases — mortgages, car loans, student loans, equity lines, personal loans. That is not the case. Certain loans are directly connected to the Fed's rate: home equity lines of credit, adjustable-rate mortgages, adjustable student loans, short-term car loans. Most short-term financing is tied directly to it.

So those credit card minimum payments are going to go up. The minimum you see this month will be higher next month. That equity line you drew on to rehab the house, do an addition, or add an ADU is going to carry a higher rate and a higher monthly payment. You'll see those things change almost immediately, within about a 30-day period.

### Why mortgage rates got better on hike day

Mortgages and savings accounts can actually see some benefit. On the news of the increase, the mortgage-backed securities market and the Treasury market actually improved a little bit. Why would mortgage rates dip when the Fed's rate is going up?

Think about long-term savings. If you remember the '80s, '90s and 2000s, a savings account or a CD yielded far more than it did from roughly 2015 on, when the Fed kept its number low. There was nothing to give, because nobody was being charged much to borrow money. Now you're going to see savings rates get better — and many investors are going to pull money out of short-term investments and move it into something more stable and secure. Putting money into a 30-year mortgage-backed security is more beneficial to them than something short-term that dips up and down. We saw the stock market take a dive today while mortgage rates got better, on the news that the Fed raised rates.

So I actually think we're going to have a pretty decent year with interest rates. I do think the Fed continues to raise by another quarter. We already got a nice dip from our highest levels in September of 2022, and I think we may see a little bit better than where we've been over the last few weeks. We'll have to see how it plays out over the next week or so.

### Who this helps right now

Obviously it helps you if you're buying and getting brand new financing at a lower rate than you could have secured in September. But if you bought a home anywhere from about June of 2022 through the end of November of 2022, there's a very good chance rates have come down a point — maybe a point and a half — and a refinance could drop your payment. Reach out, have your mortgage statement in hand so we know your balance and your rate, remember what you paid for the house, and we can run the numbers very quickly.

The other group: if you were trying to get pre-approved in 2022 and got priced out of the market, and rates have come down a point or a point and a half, you could easily qualify for more. It's a very good time to revisit that pre-approval and see where you stand at today's prices.

And if you have an equity line of credit you took out in 2021 or 2022, you are probably feeling almost double the monthly payment you originally signed up for. It really might be time to talk about rolling those two loans together into one to reduce your payment. These are things I haven't been able to talk about in literally 18 months, so I'm excited we have that opportunity today. And this might not last — this is a sweet spot. Many experts are saying we could see mortgage rates back at seven and a half, maybe eight and a half percent by the end of this year. I kind of feel like we might see seven and a half by year end and then they start to break a little. So if you're in a bind, or you've been thinking about consolidating or buying, it's a great time to jump in.

### Q&A: manufactured homes on owner-owned land

Tom and Heidi ask: *“Do you do manufactured home loans on a permanent foundation, on owner-owned land?”*

Yes, we can do that. There are stipulations on manufactured properties, and it's not just us or our mortgage company — it's across the board, because the rules and guidelines come from FHA, VA, Freddie Mac and Fannie Mae. The home has to be newer than the mid-1980s — I believe 1986, and Carrie is watching, she's my manufactured housing specialist, so she can correct me in the feed. It has to be a minimum of a double-wide; it cannot be a single-wide. And it has to be permanently affixed to the foundation, having gone through all of the HUD requirements and gotten the HUD tags to convert it from personal property to real property. There are a couple of other items, but if it's on land you own and it's permanently affixed, you should be good to go for financing.

One thing about manufactured homes a lot of people don't know: you cannot get a loan against a manufactured property as an investment. They will not allow investment properties. You need to be occupying it. So if you're thinking you'd grab a manufactured property out by the river for a summer home and rent it out when you're not using it — you're right that it'd be a nice income piece, but you're not going to get that financing as an investment on a manufactured home.

### Buyers: this is your window to negotiate

Temperature check, one more time. In September of 2022 we were in the 7% range. Today, February 1, 2023, we're in the low sixes and can easily buy down into the fives.

On the seller side, things cooled off. If you've had your home listed you know this — 30 days, 60 days, 90 days. We've seen homes listed for a hundred days and not sold. When a seller is in a market like this and they need to sell, they will do things to get the home sold. That gives you the opportunity to ask for closing cost credits, and to use those credits to buy your rate down and pay your costs. A seller sitting on the market that long isn't going to turn their nose up at your offer. If you're doing a zero-down VA loan, you might get your offer accepted *and* get the seller to cover your closing costs — getting into the home with no money out of pocket. If you're an FHA buyer at three and a half percent down, in 2020, 2021 and even early 2022 you probably weren't getting your offer accepted against a stack of competing offers. Now is your chance.

Because as the economy improves — which is what this whole show has been about — you are going to see all the buyers who put their search on hold at 7% come back. As rates come down, the market heats up, and you're back in an environment with multiple offers on the same home where it's much harder to get an offer accepted. So get on top of it. If you've been thinking about buying, or you tried and gave up, it's time to revisit that pre-approval and find out where you stand today. Maybe you're not there yet — or maybe you're ready.

### Wrap-up

To summarize: the Federal Reserve increased interest rates today by a quarter point. Although that sounds horrible and awful, my spin — the Mortgage Mom's spin — is that it's actually very positive. We've gone from three-quarter point hikes, time and time again every six weeks, to a half point, and now to a quarter. I'm seeing the light at the end of the tunnel. You have an opportunity to purchase and an opportunity to refinance, below where rates peaked in September of last year.

If you want to be part of the show, it's interactive — you put your questions in the feed, I read them out loud and answer them. To know when we go live, text the word MOM to 844-935-3634, that's 844-WE-LEND-4\. One text a week with a link to join us on YouTube; we stream to Facebook and Twitch at the same time. That's also the office number, and you can book an appointment right on the website at mortgagemomradio.com. And please share the show with anybody it could help. I'll keep bringing you this every single week. See you all next week. Bye-bye.

Debbie Marcoux is licensed by the Department of Financial Protection and Innovation under the California Residential Mortgage Lending Act, NMLS ID #237926, and additionally licensed in AZ (0941504), FL, GA, HI, ID, IL, NV, NC, OR, TN, TX, and WA. Rates and figures discussed were current as of the air date of February 1, 2023, reflect national conforming averages, and are not an offer of credit or a rate quote. Debbie Marcoux is not a financial advisor; consult qualified professionals about your individual situation.