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Consider the following table of average annual CRE mortgage rates and yields on 10-year Treasury securities: Year 10-Year U.S. Treasury Yield (%) Mortgage Rate (%)
Consider the following table of average annual CRE mortgage rates and yields on 10-year Treasury securities:
Year | 10-Year U.S. Treasury Yield (%) | Mortgage Rate (%) |
---|---|---|
2000 | 5.97 | 8.07 |
2001 | 4.99 | 7.28 |
2002 | 4.56 | 6.67 |
2003 | 4.02 | 5.82 |
2004 | 4.27 | 5.75 |
2005 | 4.27 | 5.52 |
2006 | 4.79 | 5.95 |
2007 | 4.58 | 6.01 |
2008 | 3.61 | 6.71 |
2009 | 3.29 | 7.37 |
2010 | 3.14 | 5.62 |
2011 | 2.75 | 4.99 |
2012 | 1.76 | 4.20 |
2013 | 2.38 | 4.38 |
2014 | 2.49 | 4.07 |
2015 | 2.10 | 3.89 |
2016 | 1.83 | 3.75 |
2017 | 2.34 | 3.99 |
2018 | 2.89 | 4.39 |
2019 | 2.08 | 3.73 |
2020 | 0.83 | 3.25 |
2021 | 1.47 | 3.27 |
Required:
- What was the average annual spread on mortgage rates relative to 10-year Treasury securities over the 2000 to 2021 period?
- What was the correlation between annual mortgage rates and Treasury yields over the 2000-2021 period? (Use your financial calculator or the statistical functions in Excel.)
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