Issue 153 – Hello and Happy Tuesday.

Mortgage rates actually caught a break this week. Do not get comfortable. Kevin Warsh sits for his Fed Chair confirmation hearing on Tuesday, and the US-Iran ceasefire expires on Wednesday. Back-to-back days, both capable of moving rates in either direction.

There is also a quieter story behind why rates have not fallen faster this year, even when bonds rally. We break it down in the Technicals below.

Personal Note:

The boys and I had a day out. We ventured down to Kelley Park in San Jose on Saturday for a VW car show. Was my first time back into the VW scene in nearly 22 years, and it was refreshing compared to some of the others I’d been to in years past!

On the home front, repairs continue on the 1965 Convertible. Newly discovered item was a faulty headlight switch that may or may not have started a small fire behind the dash… haha.

Enjoying the sunshine

Fantastic Type 1 examples.

Boys liked the buses.

TLDR (Too Long Didn’t Read) Summary

• ⬇️ RATES – More downward movement in wholesale prices, light.

• 📊 TECHNICALS – Why are rates higher than what the 10-year shows?

INTEREST RATES
Rates 📢 April 21st, 2026

10 Year T-Note 180-day snapshot

Rate data as of morning of publication. Unless noted otherwise, all scenarios are assuming 30 Year-Fixed mortgage, Purchase or R/T Refinance. No origination points charged, 780 FICO score, and 20% down payment. Provided for consumer education only and does not serve as a binding offer to extend lending. Payment period, interest rate, APR, and other terms subject to income, asset, and credit profile qualification. Provided courtesy of GTG Financial, Inc. NMLS 1595076. Equal housing opportunity. www.nmlsconsumeraccess.org

⏱️ Rates in 60 Seconds

📊 Rates dropped this week because inflation came in softer than expected. Here is the connection worth remembering. Inflation tracks how fast prices are rising. When prices rise faster than forecasters expect, the people who set interest rates get nervous and keep borrowing costs high to cool things down. When prices rise slower than expected, like they did in last week’s wholesale inflation report, rates get a little breathing room. That is why the 30-year ticked lower.

🏠 Weaker housing data also helped rates drop. Existing home sales fell 3.6% in March, and builder confidence dropped to a seven-month low in April. It sounds backwards, but here is why it works: when housing slows, the broader economy slows with it. A slower economy means less inflation pressure. Less inflation pressure means rates can ease. Bad housing news today, small rate relief tomorrow.

🛢️ Now the wildcard, which is oil. The ceasefire between the US and Iran expires April 22. Oil prices are already higher this morning because Iran closed the Strait of Hormuz again over the weekend. Why does oil matter for a mortgage? Because oil touches everything. Shipping, groceries, construction, travel. When oil spikes, inflation expectations spike, and mortgage rates follow. If the ceasefire falls apart next Wednesday, this week’s gains could disappear in a single afternoon.

🏦 The Fed Chair confirmation hearing is this week. Kevin Warsh, a former Fed governor, is being considered for the most powerful role in American interest rates. Warsh has publicly said he believes the Fed has room to cut rates because technology is helping bring inflation down. If the Senate confirms him, the market will start pricing in rate cuts. If they block him, the market gets skittish. Either outcome moves rates. Not every week brings a headline like this, so it is worth paying attention.

What to watch this week

• Tuesday: Retail Sales and Pending Home Sales. Strong retail numbers mean consumers are still spending, which keeps inflation pressure on and rates elevated. Pending home sales tell us whether buyers are coming off the sidelines.

• Wednesday: Mortgage Applications and the 20-year Treasury Auction. A weak auction is a quiet signal that pushes rates up quickly.

• Thursday: Jobless Claims. Continuing claims have been climbing. If that keeps going, it signals a softening labor market, which usually helps rates.

Realtor Insight: Rates got a small gift this week, but do not pass that gift to your clients as a trend. With the Iran deadline and the Fed Chair hearing both landing in the same week, volatility is the base case, not the exception. If your buyer is qualified and ready, today’s pricing is something to lock, not something to wait on. Waiting to see what happens next week is a coin flip, not a strategy.

TECHNICALS
Why Mortgage Rates Are Stuck Above Where They “Should” Be

Rates follow the bond market. That is the easy part. Here is the deeper layer most people miss. Mortgage rates do not just follow the 10-year Treasury. They follow the 10-year Treasury plus a gap called the mortgage spread, and that gap is historically wide right now. This is the real reason rates are not falling as fast as the headlines suggest they should.

• The math behind this week’s rate:

  • 📉 The 10-year Treasury yield finished last week around 4.29%, sitting near a three-week low thanks to softer inflation data and hopes for de-escalation in the Middle East

  • 📊 Since the end of the Great Recession, the historical average spread between the 30-year mortgage and the 10-year Treasury has been roughly 1.75% (175 basis points), per research from First American and industry data tracked by HousingWire

  • 🧮 If today’s market were pricing at that historical spread, the 30-year rate would land near 6.04%

  • ⚠️ The actual 30-year PMMS this week came in at 6.30%, which puts the current spread at 2.01%. That is about 26 basis points above the historical norm

Why the spread is stuck wide:

• 🏦 The Federal Reserve is still slowly shedding its mortgage bond holdings every month. Less demand for mortgage bonds means higher yields on them, which translates to higher rates for borrowers.

• 🌏 Foreign demand for US mortgage bonds has softened as tariff and trade uncertainty continues. Overseas buyers used to be a reliable source of demand. They are less so right now.

• 🏛️ Banks, the other major buyer of mortgage bonds, have been largely sidelined since 2022.

The plain English takeaway. Think of the spread as a toll between Treasury yields and your buyer’s mortgage rate. Right now that toll is running unusually high. If Treasury yields drop another quarter point over the next few weeks, buyers will likely see only a portion of that savings show up in their mortgage rate. On the flip side, when the bond market panics, mortgage rates tend to jump faster than Treasuries because the spread widens under stress.

Watch this: until the mortgage spread narrows back toward historical norms, there is a ceiling on how much relief buyers will see even if the broader bond market keeps rallying. That ceiling is the quiet story of 2026 rates, and it is why “wait for rates to drop” keeps disappointing the buyers who try it.