Key point : The Primary Mortgage Market Survey conducted by Freddie Mac found that 99 % of all residential mortgages nationwide had existing fixed rates lower than the national fixed rate average during the first week of March 2023 .
Three years ago near the start of the " pandemic " declaration in March 2020 , the 10year Treasury yield hovered close to an incredibly low and rather spooky 0.666 % yield . The 30year fixed mortgage rate is tied to the directions of the 10year Treasury yield . Today ' s 10 year Treasury yield closed at 3.966 % on March 6 , 2023 by comparison , which was about 3.3 % higher .
Historically , the 30year mortgage rate pricing is about 1.7 % over the 10 year Treasury yield ( 0.6630 + 1.7 % margin = 2.363 % 30year fixed mortgage rate , approximately ). Over the past year , the margin has widened considerably to 3 % or 4 % over and above the 10year Treasury yield to arrive at the latest 30year fixed mortgage . This widening of the margin was partly due to perceived worsening financial conditions and the Fed ' s Quantitative Tapering strategies , which included their attempt to sell off trillions of dollars ' worth of mortgage bonds in spite of their being few buyers .
As a result , the 30year fixed mortgage rate skyrocketed faster than
ever to reach somewhere between 6 % and 8 %, depending upon the borrower ' s FICO score and other creditworthiness guidelines .
Mortgage Applications
The lowest mortgage application reading of the 21st century was reached as of the 1st quarter in 2023 due to rising rates . By comparison when mortgage rates were at or near alltime record lows , there were 23.3 million home loan applications completed by consumers , according to the Consumer Financial Protection Bureau .
The lowest mortgage application reading of the 21st century was reached as of the 1st quarter in 2023 due to rising rates .
M1 and M2 Money Supply
“ M1 is the money supply that is composed of currency , demand deposits , other liquid deposits — which includes savings deposits . M1 includes the most liquid portions of the money supply because it contains currency and assets that either are or can be quickly converted to cash . However , " near money " and " near , near money ," which fall under M2 and M3 , cannot be converted to currency as quickly .” Investopedia
The federal government has not published data about M3 since 2006 . Our national money supply trends are more of a factor for causing rising inflation or falling deflationary trends more so than consumer spending .
High
The M1 money supply from $ 4 trillion to $ 20 trillion between just January 2020 and October 2021 .
Low
M2 is a measure of the money supply , which includes cash , checking deposits , and other types of deposits that are easily convertible to cash such as CDs . Last year was the first time when bank deposits declined within the same year since 1948 . This is partly why banks are finally starting to offer higher savings rates to attract more deposits because they ' re running low on cash .
The M2 yearoveryear growth swung from one extreme to another between 2020 and 2023 . It peaked at a + 26 % yearoveryear growth in 2021 and later collapsed to a 2 % by early 2023 . In the past , a negative M2 money supply that was contracting was a foreboding or ominous sign of an upcoming economic recession or severe depression like seen back in the 1920s .
The M1 and / or M2 money supply directional trends tend to mirror inflation or deflation trends . The more money that is created , the more likely that inflation will rise as well while pushing assets like stocks and real estate much higher . Conversely , a falling money supply can create a deflationary economic cycle when asset prices fall as well .
Savings : U . S . savings rates reached an alltime record low by the 1st quarter of 2023 .
66