What this actually is
What a bank charges to lend against a house, usually fixed for 30 years in the US. It tracks the 10-year Treasury yield plus a spread that widens when lenders are nervous or when the Fed is not buying mortgage bonds.
Why it matters to a person
It is the single number that decides whether household formation happens. It also creates lock-in: millions of owners hold 3% mortgages and will not sell into a 7% market, which starves the market of supply and keeps prices high even as sales collapse.
For scale
18% in 1981, 2.65% in January 2021, above 7% in 2023 — the fastest doubling on record. The fifty-year average is about 7.7%, so the 2020–21 period, not the present, was the anomaly.
How to read a release
Reading it
Watch the spread over the 10-year, not just the rate. A normal spread is 1.7 points; it widened past 3 in 2023, meaning half the pain was in the plumbing rather than in Fed policy.
The mechanism
Housing affordability in one number; the transmission channel from the Fed to the household.
What to watch: Freddie Mac PMMS; MBA applications. Arrives weekly; the effect typically lasts weeks. Impact tier 2 — Directional: Moves the index for days or weeks. Scheduled data releases, policy decisions, global spillovers, and the prices of money and energy. This is the tier most professional attention is spent on.
Its neighbourhood
Everything this entry connects to directly. Click any point to follow it.
What it moves next
Documented transmission: when this moves, these tend to move after it.
What moves it
Dials it feeds
This factor is one input to a composite reading on the Analytics page.
Chains it would confirm
Sectors it moves most
Trends tracked by this
Also in Consumer and housing
- Retail sales
- Consumer confidence and sentiment
- Personal income, spending, and saving rate
- Consumer credit and delinquencies
- Housing starts and permits
- Existing and new home sales
- Home prices
- Household net worth and the wealth effect
- Household savings buffers
- Homeowners insurance availability and cost
- The K-shaped consumer
- Homebuilder sentiment and pending home sales
- Market rent indices
- Auto sales (SAAR) and inventories
- Restaurant same-store sales and hotel RevPAR
- Card-spending panels
- Retail gasoline prices
- Residential electricity prices
- Childcare and tuition inflation
- Pet spending and vet prices