"Mortgage Rates Leap Toward 4.0%, Highest Since October 2019"

by Calculated Risk on 2/04/2022 04:17:00 PM

Today, in the Calculated Risk Real Estate Newsletter: “Mortgage Rates Leap Toward 4.0%, Highest Since October 2019”

A brief excerpt:

With the strong employment report for January, interest rates have increased.

Mortgage News Daily reports that the most prevalent 30-year fixed rate is now at 3.85% for top tier scenarios. Matthew Graham at Mortgage News Daily wrote today: Mortgage Rates Leap Toward 4.0%, Highest Since October 2019

If we disregard the once-in-a-lifetime volatility seen in March 2020 (and we absolutely should), today’s mortgage rates are now in line with the highs seen in October 2019. The average lender is now quoting conventional 30yr fixed rates in the 3.75-3.875% neighborhood. That’s a full eighth of a point higher than yesterday, and more than a full percentage point higher than the lowest rates in August 2021. Many less than perfect loan scenarios will see rates over 4%.

With the ten-year yield at 1.93%, and based on an historical relationship, 30-year rates should currently be around 3.8%. So, mortgage rates are as expected based on the ten-year yield.

The graph shows the relationship between the monthly 10-year Treasury Yield and 30-year mortgage rates from the Freddie Mac survey.

There is much more in the article. You can subscribe at https://calculatedrisk.substack.com/