Why Mortgage Rates Are Sticky Even as the Fed Holds Steady

Lucas and Luna dig into a puzzle that's driving the housing market right now: mortgage rates are climbing again even though the Federal Reserve has kept rates flat for months. They use real data from May 2026 — including the 30-year fixed rate hitting 6.51 percent, up from 6.36 just weeks earlier — to explain what's behind the move. The episode focuses on the spread between mortgage rates and the ten-year Treasury yield, which remains unusually wide by historical standards. They discuss the role of MBS volatility, bank balance sheet costs, and prepayment risk, and how this 'lock-in effect' is keeping both buyers and sellers on the sidelines. Specific examples from recent homebuilder commentary and secondary market trends make the concept concrete. No vague macro talk — just a clear look at one specific mechanism that's reshaping affordability this spring. #MortgageRates #HousingMarket #FederalReserve #TreasuryYield #MBS #LockInEffect #HousingAffordability #RealEstate #Homebuying #30YearFixed #Spread #PrepaymentRisk #Economics #Macro #FexingoBusiness #BusinessPodcast #Podcast #HousingEconomy Keep every episode free: buymeacoffee.com/fexingo