The Mortgage -Treasury Spread Trends Lower in September

Through the last month of Q3 and thru the first week of Q4, the 10-year Treasury Constant Maturity rate has trended slightly higher. At the same the 30-year fixed mortgage rate as determined by Freddie Mac’s Primary Mortgage Survey (PMMS) has trended lower, falling to just one basis point from the record lower reached in mid-September. The convergence of the 10-year Treasury rate with 30-year fixed-rate mortgage rate bodes well for the economy and represents lower risk for investors. The average spread since September is 222 basis points, still above the pre-pandemic range between 150 and 200 basis points.