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Thursday, April 06, 2023

Mortgage Rate Update

by Calculated Risk on 4/06/2023 03:04:00 PM

Today, in the Calculated Risk Real Estate Newsletter: Mortgage Rate Update


Mortgage News Daily reports that the most prevalent 30-year fixed rate is now at 6.18% for top tier scenarios. Usually there is a fairly steady spread between the ten-year Treasury yield and 30-year mortgage rates, although - as housing economist Tom Lawler explained in Mortgage/Treasury Spreads, Part I and Part II - the spread has widened due to several factors including volatility and pre-payment speeds.

With the ten-year yield at 3.3%, and based on an historical relationship, 30-year rates would currently be around 5.0%. So, mortgage rates are higher than expected based on the ten-year yield - for reasons Lawler explained

Year-over-year change in PaymentsThe graph shows the relationship between the monthly 10-year Treasury Yield and 30-year mortgage rates from the Freddie Mac survey. Note that the red dots are the last 12 months of data.
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