Finance
South Dakota's mortgage market is influenced by the Federal Reserve's monetary policy. When the Fed raises the federal funds rate, South Dakota mortgage rates generally:
ADecrease as competition increases
BIncrease, making home purchases more expensive✓ Correct
CStay the same since state rates are regulated independently
DDecrease to offset the federal increase
Explanation
When the Federal Reserve raises rates, borrowing costs throughout the economy generally rise. This typically leads to higher mortgage rates, reducing affordability and potentially slowing the housing market.
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