For the week ending 12/12/24, 10-Year U.S. Treasury rates increased by 15bp. In the following week ending 12/19/24, mortgage rates rose by 12bp to 6.72%. Typically, Treasury rate changes occur first, followed by adjustments in mortgage rates.

This past week, Treasury rates climbed by an additional 25bp, signaling that mortgage rates are likely headed toward the 7.00% range.

For a $100,000 loan, the monthly payment increased from $639 to $647, equating to an additional $0.26 per day.

For the week ending 12/19/24, mortgage rates increased by 12bp, while 10-Year Treasury rates rose by 25bp. The spread between the two decreased by 13bp to 215bp.

With the historical spread at 168bp, there is currently a “safety cushion” of 47bp above the historical norm. However, this low spread is unlikely to persist, and further increases in mortgage rates are expected.

The historic spread between the 10-Year Treasury and mortgage rates is 168bp (see green line, right axis) and is currently 47bp above the historical norm.

In July, this spread was 150bp. Recently, mortgage rates have decreased at a faster pace than 10-Year Treasury rates.

Bill Knudson, Research Analyst LANDCO NEXA