This is a YouTube video titled "Mortgage Rates Dipped and Buyers Jumped!" containing a detailed explanation about the impact of mortgage rates on home buyer activity. The speaker discusses recent trends in mortgage rates, mortgage spreads, and their influence on the housing market, providing insights into economic factors affecting interest rates as of March 2025.
Just how important are mortgage rates to home buyer activity? We saw yet again just last week, mortgage rates hit their best levels of the year and home buyer applications went up about 7% last week alone. This is a few weeks in a row of the same activity. Mortgage rates get better, more buyers jump back into the market. We've seen this time and time again the last few years. It's also important that mortgage spreads continue to get better. So keep in mind, mortgage rates are built of a floor of the 10 year treasury yield, which is about four and a quarter right now, and then mortgage spreads, which is about two and a quarter. That's how you get about a mid 6% interest rate on a perfect conventional scenario. Now if this was 2023, where the market was still very uncertain, lenders investors had very high mortgage spreads in the same market. We would be about seven and a quarter. So we're way improved since then, but we're still about a half percent away on mortgage spreads for what a normal spread would be. So as the market continues to feel more comfortable and things continue to turn, you know, return to normal in the mortgage world, the same market would produce about a 6% interest rate. And then if the economy has some issues this year, we should see the floor, the 10 year treasury get lower. That could bring 5% rates at the end of the year.
