Mortgage rates started the year up slightly. The 30 Year Fixed Rate Mortgage was at 6.48% and the 15 Year Fixed Rate Mortgage was at 5.73% in Freddie Mac’s Weekly Survey released today. See survey below with its most recent assessment of the mortgage rate landscape.
(dynamic chart with current data)
In other rate news, the Fed Funds Rate target was increased by 0.50% last month. The Fed recently said it will continue tapering its balance sheet as a major part of its quantitative tightening (QT) plan. The plan is to reduce mortgages held by the Fed by $35 billion per month and US Treasury securities held by the Fed by $60 billion per month. In 2022, they did not stick to the stated Fed tapering plan. Most significantly, mortgages are not coming off the balance sheet according to plan.
Also, the yield curve for treasury securities remains inverted with long term rates lower than short term rates. As seen below, these levels of inversion have not happened in a very long time and tend to be predictive of recessions.