The collapse of Silicon Valley Bank and Signature Bank has led to a decline in mortgage rates as Treasury yields have fallen. The failure of these two banks has caused concern about the stability of the financial system, and it remains to be seen if this crisis will be contained to just these two institutions. The widening of mortgage spreads, due to uncertainty about the US economy and the Fed's ability to control inflation, has caused mortgage rates to remain high. However, if spreads calm to the high end of the normal range, mortgage rates could drop by about three-quarters of a percentage point. Despite the collapse of these two banks, the US economy has shown remarkable resilience, and some believe it is unlikely that home prices will crash again like they did during the Great Recession. What do you think? Comment below.
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Silicon Valley Bank, Signature Bank, housing market, bank failures, U.S. economy, mortgage rates, Treasury's, investors, mortgage-backed securities, risk-off trading, Federal Reserve, interest rates, mortgage spreads, bank collapses, Great Recession.
Mortgage Rates Tumble As Banks Collapse