For the week ending 11.10.22 Mortgage rates DECREASED 47bp to 6.84%. NO TYPO. Rates decreased due to the improved Consumer Price Inflation report from 11.10.22.
For a $100,000 loan, the monthly payment is DECREASED by $32 to $654/mo or $1.00/day.
While mortgage rates DECREASED 47bp, 10 Year Treasury rates DECREASED 5bp. The net difference is a 42bp decrease in a spread of 307bp. With the historical spread being 168 there now exists a “safety cushion” of 139bp 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 an 139bp above historical norm. For this spread to return to the historical norm, either mortgage rates will decrease further or 10 Year Treasury rates will increase.