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Mortgage Rate Slides To Lowest Since April, Tsy Spread Narrows

US
BulletMarketsFixed IncomeForeign Exchange
  • 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

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  • 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