30-Year Fixed Mortgage Rates

Even though the Federal Reserve has dropped the Fed Funds Rate from 5.25% down to 1.00% over the last year, the 30-year fixed mortgage rate has actually increased 33 basis points over the same time period.  The spread between the two is now at its widest margin since at least 1998, after it recently overtook the high spreads seen during the low-rate housing boom heyday from 2002 to 2004.  So while home buyers have yet to benefit from the 4.25% drop in the Fed Funds Rate, banks that have the ability to lend are making a killing.