Headline: Mortgage rates decreased 4bp and the 10-year Treasury rates decreased 25bp Spreads are now 321bp. While not a record, the last time spreads were this large was November 2022 and mortgage rates feathered down 100bp over the following 12 weeks.
The Fed's next meeting is 5.2.23. The next jobs numbers release is 4.7.23.
On 4.12.23 the CPI data for March will be released. It is envisioned the annual CPI will decrease from the current 6.0% level to ~5.2% because the March 2022 spike due to Russia's invasion will fall out of the 12-month rolling CPI calc. Between the large spread and a decreasing CPI, a case can be made that mortgage rates may go under the 6.00% level in the next few weeks barring a significant change in jobs.
For the week ending 4.6.23 Mortgage rates DECREASED 4bp to 6.51%.
For a $100,000 loan the monthly payment DECREASED $3 to $632/mo or $0.09/day
Mortgage rates DECREASED 4bp, 10 Year Treasury rates DECREASED 25bp. The net difference resulted in an increase of 21bp in the spread to 321bp. With the historical spread being 168 there now exists a “safety cushion” of 153bp above the historical spread.
The historic spread between the 10 Year Treasury and mortgage rates is 168pb (see green line, right axis) and currently, there is a 153bp above the historical norm. For this spread to return to the historical norm, either mortgage rates will decrease further or 10 Year Treasury rates will increase. The last time spreads were this large (Nov 10, 2022) mortgage rates feathered down 100bp over the following 12 weeks.