For the week ending 6.8.23 Mortgage rates decreased 8bp to 6.94%. 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 $5 to $661/mo or $0.18/day.
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Mortgage rates decreased 8bp and 10 Year Treasury rates increased 12bp for the week ended 6/8/23. The net difference resulted in a decrease of 20bp in the spread to 321bp. With the historical spread being 168, there now exists a “safety cushion” of 153bp above the historical spread.
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The historic spread between the 10 Year Treasury and mortgage rates is 168pb (see green line, right axis) and currently, there is a 173bp above the historical norm which is within 28bp 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 the 10 Year Treasury will increase.
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Bill Knudson, Research Analyst LANDCO ARESC