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Mortgage Rates: April 14th 2022

MORTGAGE RATES ARE NOW OVER 5.00% and increased 28bp to 5.20%. 28bp was nearly a 3 sigma event that being 30bp (in 51 years a 1% event)

For a $100,000 loan, the monthly payment increased by $17 to $549 which is equal to $0.57 a day. Mortgage rates of 5.00% to 5.50% by the end of April are very possible given the Fed’s announcement.

Rates rocket up and feather down.

For now and into the foreseeable future, they will continue to increase. As 10 Year US Treasury rates declined in 2020 due to COIVD, mortgage rates were slower to react, as such the spread between the two increased. Eventually, Mortgages decreased and the historic difference of 168pb was attained (see green line)

At the start of 2022 mortgage rates have increased FASTER than the 10-year Treasury, thus the spread has increased beyond their 168 spread level. This past week the 10 Year rose 17bp while Mortgage rates increased more 28bp thus their spread increased 11 to be 69bp above the historical norm.

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