Mortgage rates are hovering around the highest they’ve been in almost two decades. And most homebuyers are asking the question, “Why are mortgage rates SO high right now?” If you want the answer, you’ll need to understand how the Fed, bonds, and banks all interact to decide today’s mortgage rates. And, if you know how mortgage rates work, you’ll also know how to get a lower mortgage rate on your next home purchase.
Dave Meyer, VP of Market Intelligence at BiggerPockets, is back to break down mortgage rates for those of us who don't have economics degrees. Simply put, the Fed controls the federal funds rate, which influences the bond market, and the bond market influences how much banks charge you in interest. Already lost? Don’t worry; Dave’s got the whiteboard out to walk you through every step of mortgage rates explained. He’ll also show you EXACTLY what you have to do to get a lower interest rate on your next mortgage.
