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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