August 04, 2022 14:21 GMT
- The Freddie Mac 30Y mortgage rate has dropped from 5.30% to 4.99% this week, the lowest since early April whilst warning of more volatility ahead.
- It has cooled from a peak of 5.81% in late June with the spread to 30Y Tsy yields narrowing 60bps in the process, after a slump in mortgage demand with separate MBA purchase mortgage applications the lowest since 2016 barring the lockdown months.
- Mortgage rates are still extremely elevated though – Bloomberg estimate a $300k 30Y mortgage costs an additional $326/mth compared to the end of last year – and will continue to weigh on housing sectors with attention on a potential jobs hit at tomorrow’s payrolls report having so far been relatively robust.
Freddie Mac 30Y (yellow), MBA 30Y (green) and Freddie Mac to 30Y Tsy yield spread (red]Source: Bloomberg