Borrowing several hundred thousand dollars with the promise of paying it back over three decades of monthly payments at just 6.5% interest — with no prepayment penalty and ample ways to adjust financing terms if necessary — is pretty cheap, most mortgage and housing industry economists would agree.
But it’s just not as good as 6%, which is where average mortgage rates for typical 30-year home loans spent much of February, before the U.S. and Israel started the Iran war, triggering a global energy and trade shock that has spiked inflation and borrowing costs.
“The main driver for a lot of that rise was inflation, but the next pivot point for mortgage rates and spreads is how [Federal Reserve Chair] Kevin Warsh manages the balance sheet, give...