Ep. 223 - Why Are Mortgage Rates STILL Above 6%? Here's The Truth...

What's Really Behind Your Mortgage Rate?

In episode 223, Quinton Harris breaks down the fundamental components that determine mortgage rates, addressing common questions from his audience about terms like "the spread" and "10-year treasury." He explains how mortgage rates are calculated by combining the base rate (10-year treasury) with the spread, which represents the premium investors require for taking on mortgage-backed securities risk.

The episode delves deep into why current spreads are higher than historical norms, examining factors like increased origination costs, compliance requirements, and market volatility. Quinton emphasizes how consistency in rates could transform the real estate market, suggesting that even a steady 6% rate over four months could significantly boost both home sales and refinancing activity.

[00:00] - Introduction and Episode Overview

[01:00] - Base Rate and 10-Year Treasury Explanation

[03:56] - Understanding the Spread and MBS Risk

[04:36] - Impact of Market Volatility on Rates

[09:22] - Current Spread Analysis

[13:47] - Potential Market Impact of Stable Rates

Key Quotes:

"The old adage, the higher the risk, the higher the reward, the lower the risk, the lower the reward." - Quinton Harris

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