Mortgage Rate Spreads

MBS yields have dropped below 4.0%, and mortgage rates are likely to follow them down (tho not that far).

The spread between the two averages about 15 bps,¬† but with the quantitative easing, rates have been forced much lower — and the spread has widened out to 131bps.

If this persists, expect to see mortgage rates below 5%!

chart courtesy of Peter Boockvar, Bloomberg

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