How mortgage interest rates work (and why they're currently out of whack)

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  NPR.

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  There is a mystery in the mortgage market.

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  The long running relationship between mortgage interest rates and ten year treasury bonds, ten year loans to the us government has changed.

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  That's right.

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  In normal times, mortgage interest rates are usually a little less than two percentage points higher than what you would get on a ten year, ten year treasury.

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  So let's say treasuries are paying 4%.

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  You would expect a mortgage interest rate of a little less than 6%.

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  But over the last couple of years, that relationship has broken down.

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  One of our listeners, Matt Gazules, noticed this and asked us about it.

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  I noticed that they had been above 2% and historically speaking, that is very high.

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  Matt, we are on the case.

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  We're going to figure out what is happening here.

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  This is the indicator from planet money.

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  I'm Waylon Wong.

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  And I'm Darian woods.

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  Today on the show how mortgage interest rates work and why they're currently out of whack with new borrowers footing the bill.

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  Support comes from our 2024 lead sponsor of the indicator from Planet Money, Amazon business everyone could use more time.

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  Amazon Business offers smart business buying solutions so you can spend more time growing your business and less time doing the admin.

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  Learn more@amazonbusiness.com dot this message comes from NPR sponsor MeRRILL whatever your financial goals are, you want a straightforward path there.

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  But the real world doesn't usually work that way.

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