The spread between the 10-year Treasury and mortgage rates is growing, as it currently stands at 235 basis points, says Lending Tree’s Chief Economist, Tendayi Kapfidze
Lending Tree’s Chief Economist, Tendayi Kapfidze, in a recent interview with CNBC said he expects mortgage rates to fall further.
Kapfidze, during an appearance on the “Squawk Box,” said the spread between the 10-year Treasury and mortgage rates is growing, as it currently stands at 235 basis points. Prior to COVID-19 it was 170.
He added since the Federal Reserve announced unlimited buying in March, the market has seen a 30 basis points drop. He said an additional 65 basis points drop (2.3%) would be needed to get back to pre-pandemic numbers.
But I think we’re going to easily get another 30 basis points over the next three to four months to take us to 2.7 [percent], he said.
While he projects further declines, he said “everything is uncertain” in this current environment.
There’s two thoughts to buying a house and getting a mortgage. One part is the obviously the interest rate—that’s very favourably—and the other part is your income and employment, and that’s very uncertain right now, Kapfidze said, adding now is an optimal time to enter the market before lending standards tighten further.
What is also concerning to Kapfidze is the labour market. He noted while the latest jobs report highlights those coming off temporary employment, the share of workers being permanently laid off is rising.
So, what we’re seeing is that the jobs crisis is migrating into more permanent jobs and migrating up the income chain … into folks who would be potential homebuyers, he said.
The articles are for information purposes only and Invest for Property shall not be held responsible for any errors, omissions or inaccuracies within it. Any rules or regulations mentioned within the website are those relevant at the time of publication and may not be the most up-to-date.
Invest for Property does not endorse any of the products or services that appear on it or are linked to it and are not liable for any action that you may take as a result of the content of this website, or losses or damage you may incur doing so.
There is no obligation to purchase anything but, if you decide to do so, you are strongly advised to consult a professional adviser before making any investment decisions.
Please remember that investments of any type may rise or fall and past performance does not guarantee future performance in respect of income or capital growth; you may not get back the amount you invested.