Summary: Mortgage rates are approaching 6% after hitting a low of 2.5% at the beginning of 2021. While the absolute rate of 6% is relatively low from a historical perspective, it represents a huge move in a short period of time. The real question is what impact will this interest rate shock have on housing sales/prices and the massive $2.9T mortgage back security (MBS) market. Notably, the 2008 housing bust set-off the “Great Recession” after the sub $1T MBS market took a hit as home values cratered, threatening the viability of banks and hedge funds that were highly levered in this asset class. Notably, mortgage rates did not spike prior to the 2008 housing crash as is currently the case.