Part 7/13:
The Ebb and Flow of Mortgage Rates
Despite mortgage rates being at their highest in two decades, the broader interest rate environment isn't necessarily at its peak. The core problem is demand; with the government and large investors retreating from the mortgage market, fewer bonds are bought, driving rates even higher.
Mortgage Liquidity Challenges
The 30-year fixed mortgage now averages 7%, up sharply over the past ten months.
The 10-year treasury yield, meanwhile, has risen to about 4.1%, with the difference (spread) widening due to decreased liquidity.
The inability or unwillingness of large buyers to participate in government-backed securities has led to mortgage rate surges, further dampening home sales.