Mortgage Rates

Last year, higher interest rates established by the Fed set the benchmark on which altered credit spreads had to be determined by investors. As the Fed steadily raised its rate last year, the Fed’s direct actions – in relation to a tightening of the money supply – moved the country out of the low interest rate environment we had been in. That low-rate environment, having served as the “fuel” for elevated levels of home purchases, and corporate borrowing. As the Fed raised the Federal Funds Rate last year, mortgage rates followed accordingly.