Headline: The spread between mortgage and treasury rates is now at 308bp. While not a record, the last time spreads were this large was November 2022 and mortgage rates feathered down 100bp over the following 12 weeks.
For the week ending 4.20.23 Mortgage rates INCREASED 12bp to 6.62%.
For a $100,000 loan the monthly payment INCREASED $8 to $ 640/ mo or $ 0.26/ day
Mortgage rates INCREASED 12bp, 10 Year Treasury rates INCREASED 9bp. The net difference resulted in an increase of 3 bp in the spread to 308bp. With the historical spread being 168 there now exists a “safety cushion” of 140bp above the historical spread.
The historic spread between the 10 Year Treasury and mortgage rates is 168pb (see the green line, right axis) and currently, there is a 140bp above the historical norm. For this spread to return to the historical norm, either mortgage rates will decrease further or 10 Year Treasury rates will increase. The last time spreads were this large (Nov 10, 2022) mortgage rates feathered down 100bp over the following 12 weeks.
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