The Knudson File: Mortgage Rates Decreased to 5.33%

Mortgage rates decreased 15 basis points, while 10 Year US Treasuries decreased 9 bps, thus spread decreased by 6 bps to 258 bps or 90 bps ABOVE the 168 bps average.  

30 Year Mortgage Rates – Week Ending 5.26.22

Rate VS Spread

The historic spread (aka difference) between the 10 Year Treasury and mortgage rates is 168 bps (as indicated by the green line below). At the start of 2022 mortgage rates have increased FASTER than the 10-year Treasury. This past week the 10 Year decreased by 9 bps while Mortgage rates decreased by 15 bps thus a 6bp decrease in spread occurred and the spread is 90 bps 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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