For the week ending 6.1.23 Mortgage rates increased 22bp to 7.02%. Since the middle of March, mortgage rates had been in a tight range between 6.50% to 6.65%. SVB bank went under March 10. For a $100,000 loan the monthly payment INCREASED $15 to $666/mo or $0.49/day.
The historic spread between the 10 Year Treasury and mortgage rates is 168pb (see green line, right axis) and currently there is an 129bp above historical norm. For this spread to return to the historical norm, either mortgage rates will decrease or 10 Year Treasury rates will increase. Treasuries increased 18bp this past week (prior week was 26bp).
The historic spread between the 10 Year Treasury and mortgage rates is 168pb (see green line, right axis) and currently there is an 173bp above historical norm. Which is within 8bp of the record high of 11.10.22. After that date, mortgage rates declined 80bp. For this spread to return to the historical norm, either mortgage rates will decrease or 10 Year Treasury rates will increase.
Bill Knudson, Research Analyst LANDCO ARESC