Personal Economics 101

 

More than reversing a notable two-day drop, rates on 30-year mortgages roared back Thursday, surging almost a quarter percentage point higher to set a new historic record. Rates for every single mortgage type were up Thursday, with most averages rising by double-digit basis points. Mortgage Rates Rise Across the Board, Setting New Record for 30-Year Average Kelly Evans: Who is really raising rates in Washington?

By SABRINA KARL , Investopedia Rates on 30-year mortgages rose again Monday, adding to the jump they saw Friday and pushing the flagship average almost back to the historic 22-year high it registered earlier this month. Averages for most other loan types were flat to mildly up Monday, with only a couple of averages declining. Rates on 30-year new purchase mortgages gained 6 basis points Monday, after jumping 16 basis points Friday. That raises the 30-year average to 7.82%, which is just barely below Sept. 7's historic reading of 7.84%—its highest mark since 2001. Monday rates on 15-year loans rose only a minor 2 basis points, nudging the average to 7.15%. Like 30-year rates, the 15-year average is now back within a couple of basis points of its recent peak—a 21-year high of 7.17% reached in mid-August. Jumbo 30-year rates held steady for a second day Monday, at the average's high-water mark of 7.02%. Though daily jumbo averages are not available before 2009, it's reasonable...

By Kelly Evans, CNBC The yield curve is useless! They exclaim. The recession should have been here by now! No, no. The recession is not late yet. And if it doesn’t show up for another three or even six or nine months, that wouldn’t be all that unusual by historical standards. Looking back over the past seven decades, yield curve inversions have occurred anywhere from seven to twenty-five months before recessions began. That’s according to research from MKM’s Michael Darda. The average is fourteen months, and we are currently in month thirteen since the one-year Treasury began yielding more than the 10-year, which is the preferred metric for many professionals to watch. So if the recession doesn’t begin in the next month or two, then the lag is longer than average. But still not unprecedented! And given the dual supports of massive fiscal spending and the Fed balance sheet swallowing up much of the paper losses in the financial system right now, it’s little wonder we’re seeing a de...

 Up from 6.09% on Feb. 3, 2023.

 

Interactive Chart here . 

An inverted yield curve is often seen as a warning that a recession is looming. Longer-term yields are usually higher than shorter-term yields because investors want to guard against the risk of unexpected inflation and rate increases. The yield on the 10-year Treasury note dropped to 0.78 percentage points below the two-year yield, the largest negative gap since 1981, before easing slightly. The inversion reflects both surprising positive news on inflation as well as the view that the Federal Reserve will continue to raise interest rates and keep them at elevated levels.