For the week ending 2.9.23 Mortgage rates INCREASED 18bp to 6.73%.
For a $100,000 loan, the monthly payment INCREASED $12 to $647/mo or $.40/day.
While mortgage rates INCREASED 18bp, 10 Year Treasury rates INCREASED 2bp. The net difference resulted in an increase of 16bp in the spread to 285bp. With the historical spread being 168 there now exists a “safety cushion” of 117bp 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 117bp 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.