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The Knudson File: Mortgage Rates Decreased 5 BPS to 5.48%

Mortgage rates decreased 5 basis points while 10 Year US Treasuries had NO Change, thus spread decreased by 5bp to 264bp or 96bp ABOVE the 168bp average.

30 Year Mortgage Rates

For the week ending 5.19.22 Mortgage rates barely decreased 5bp to 5.48%. For a $100,000 loan, the monthly payment decreased by $3 to $566 which is equal to $0.10 a day.

Rate vs. Spread

The historic spread (aka difference) between the 10 Year Treasury and mortgage rates is 168pb (see green line). At the start of 2022 mortgage rates have increased FASTER than the 10-year Treasury. This past week the 10 Year did not change while Mortgage rates decreased 5bp thus a 5bp decrease in spread occurred and the spread is96bp above the historical norm. That is a large spread but given how quickly rates have recently risen, pricing personnel is going to want to “hold onto this cushion” to be safe against unexpected rate increases.

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