For the week ending 6/22/23 Mortgage rates decreased 2bp to 6.90%. 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 decreased $1 to $658/mo or $0.04/day.
Mortgage rates DECREASED 2bp while the 10 Year Treasury rates increased 8bp for the week ended 6/22/23. The net difference resulted in a decrease of 10bp in the spread to 310bp. With the historical spread being 168, there now exists a “safety cushion” of 142bp above the historical spread.
The historic spread between the 10 Year Treasury and mortgage rates is 168pb (see green line, right axis) and currently, there is a 142bp above historical norm. 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