For the week ending 8.25.22 Mortgage rates INCREASE 42bp to 5.75%.
For a $100,000 loan the monthly payment INCREASED $26 to $584/mo or $0.88/day
While mortgage rates INCREASED 42bp, 10 Year Treasury rates INCREASED 16bp. The net difference is a 27bp increase in a spread of 272bp. With the historical spread being 168 there now exists a “safety cushion” of 104bp above this historical spread.
The historic spread between the 10 Year Treasury and mortgage rates is 168pb (see the green line, right axis) and currently, there is a 104bp above the historical norm. For this spread to return to the historical norm, either mortgage rates will decrease or 10 Year Treasury rates will increase.