Understanding the 10 year treasury and the 30 year fixed mortgage rate
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FACT: The 30 year Mortgage rate doubled last year. It went from 3.22 to 6.42% at the end of 2022. There has never been a year that has had this quick of a rise in the 50 years of tracking data.
Understanding the 10 year treasury and the 30 year fixed mortgage rate will really help understand what is happening in the market trajectory this year. For the past fifty years, the 30 year mortgage rate has moved in unison with the 10 year treasury. The average spread has been 1.7%. If you take the 10 year treasury rate, and add 1.7%, you’ll get the 30 year fixed rate.
Why are rates not at 5.5%? The average spread 2000-2021 1.79 you got your average.
RIGHT NOW:
Understanding the 10 year treasury and the 30 year fixed mortgage rate will really help understand what is happening in the market trajectory this year. For the past fifty years, the 30 year mortgage rate has moved in unison with the 10 year treasury. The average spread has been 1.7%. If you take the 10 year treasury rate, and add 1.7%, you’ll get the 30 year fixed rate.
Why are rates not at 5.5%? The average spread 2000-2021 1.79 you got your average.
RIGHT NOW:
The spread has jumped 2.79! This is 100 basis points or 1% higher than normal, which has caused concern in the market. If we were back at the normal spread, we’d be back at the 5.5% rate.
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