We’re going through a changing market, not a difficult market, nothing like 2008, nothing like 2020, but it is a market that’s causing some confusion. We have to alleviate that confusion in the consumer as fast as we possibly can.
For over 50 years there’s a spread, there’s a 10-year treasury yield, and then there’s a spread, something that’s added to that by the banking industry to form the mortgage rate. That’s their piece of the mortgage rate that they get to keep, all right? And for 50 years that number averaged out to be 1.72%. So whatever the 10-year treasury yield was, if you added 1.72% to the top of that, that would be your mortgage rate. Well, the challenge is, starting from the beginning of this year, we’ve blown that 1.72% away. We started one point above that, meaning mortgage rates were one point above where they would normally be. And right now as of this recording, where we stand is we’re over three percentage points above that. Almost double what the normal rate was.
Let’s not worry about what the headlines say except for the fact that consumers are reading them. Sometimes it feels like a tug of war. Tug of war, there’s two sides of the rope. And then there’s a red ribbon right in the middle. And then there’s a mark on the ground, and the red ribbon starts in the middle, right on the mark. I’m not trying to drag people over to the positive side, to the Pollyanna side.Â
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