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Mortgage Rates Decrease to 5.50%

For the week ending 7.28.22 Mortgage rates decreased 24bp to 5.50%. For a $100,000 loan the monthly payment decreased $15 to $583/mo. or $0.50/day.

30-Year Mortgage Rates

While mortgage rates decreased 24bp, 10 Year Treasury rates decreased 23bp causing a 1bp decrease in the spread to 282bp. With the historical spread being 168 there now exists a “safety cushion” of 114bp above this historical spread.

Lending Rates and Borrowing Costs

The historic spread between the 10 Year Treasury and mortgage rates is 168pb (see the green line, right axis) and currently, there is a 114bp above the historical norm. Given how quickly rates have recently risen, pricing personnel is going to want to retain this “114bp cushion” to be a safeguard against unexpected rate increases given both the recent robust New Jobs report and CPI increasing to 9.1.

Bill Knudson – Research Analyst for Landco ARESC

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