This graph shows the 10 year treasury yield in blue, and the "spread" between the yield and the mortgage rate. You can see on the left the rates during 2020 and 2012 were about 5.28% but right now they are 6.49% (down from over 7% two weeks ago). But if the spread was normal the rates should be about 5.49%, which is now anticipated. In fact Barry Habib with MBS recently said "because we see a slowdown, and we see inflation comparisons start to become more favorable, you'll start to see that inflation number move lower, lower, lower and lower. As a result mortgage rates should move similarly on a downward trajectory probably giving us around 5% or below 5% in the next six months.. So, given the very slow housing market right now causing us to get some super buys for our clients it makes sense to buy now and refinance later.

Mortgage debt has been a topic of discussion as a result of the increase in home prices over the last few years. Some were worried that consumers would be back to using their homes as "ATMs". That appears to have not been the case, as you can see on this chart mortgage debt when compared to income is at near record lows. This is most likely a result of increased appreciation in homes as well as people refinancing to lower rates, along with many more people paying off their homes. In fact right now about 58% of Americans have more than 50% equity in their homes vs. in 2008 it was only about 20%. For this reason, we shouldn't see too many foreclosures as people who cant afford their homes will sell and pocket some money before giving the home back to the bank. As a result, there should not be a foreclosure driven crash in sales prices.