For the week ending 4/6/23, mortgage rates decreased by 4 bp to 6.51%. For a $100,000 loan, the monthly payment decreased by $3 to $632/month or $0.09/day.
Mortgage rates decreased by 4bp and 10-Year Treasury rates decreased by 25bp. The net difference resulted in an increase of 21bp in the spread to 321bp. With the historical spread being 168, there now exists a “safety cushion” of 153bp above the historical spread.
The historic spread between the 10-Year Treasury and mortgage rates is 168bp (see green line, right axis), and currently, there is a 153bp difference above the historical norm. For this spread to return to the historical norm, either mortgage rates will decrease further, or 10-Year Treasury rates increase. The last time spreads were this large (Nov 10, 2022), mortgage rates decreased by 100bp over the following 12 weeks.
