Mortgage Rates Are Rising Much Faster Than Treasury Yields. What’s the Deal?

by Wolf Richter
Wolf Street

Is this spread heading to what happened in the 1970s and 1980s when the Fed battled blow-out inflation?

The average 30-year fixed mortgage rate tracks the 10-year Treasury yield, running roughly in parallel but higher. It tracks the 10-year yield because the average 30-year mortgage gets paid off in just under 10 years, either through the sale of the home, or through a refi. But they don’t move in lockstep, and the difference between the two – the spread – has been widening sharply, with mortgage rates suddenly rising much faster than the 10-year yield.

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