For the week ending 12.8.22 Mortgage rates DECREASED 16bp to 6.56%.
For a $100,000 loan, the monthly payment DECREASED $11 to $636/mo or $.35/day.\
While mortgage rates DECREASED 16bp, 10 Year Treasury rates DECREASED 5bp. The net difference is an 11bp decrease in a spread of 308bp. With the historical spread being 168 there now exists a “safety cushion” of 140bp above the 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 140bp 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.