Rate Rise

With the 10-year Treasury at 2.8%, based on historical relationships, a 30-year conventional mortgage should have a rate of 4.5%, however, it’s now over 5%! I suspect that this is because investors expect the Fed to keep raising rates. Given that the Fed might raise the Fed funds rate as high as 3.25% and maybe 4%, and assuming the yield curve remains very flat, that suggests that mortgage rates should peak at 5.7%, possibly 6%.