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Why have mortgage spreads widened?

The sharp rise in the spread between the 10-year Treasury yield and 30-year mortgage rate primarily reflects the speed at which yields dropped back. But tighter credit conditions also look to be playing a role. We expect the spread to ease back over the next few weeks which, alongside a rebound in the 10-year yield, will keep the 30-year mortgage rate close to its current level of 3.85%.

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