Company: AOMN
Filing Date: 2025-03-24
Form Type: 10-K
Source: 0001766478-25-000019
Chunk: 124

Company: Angel Oak Mortgage REIT, Inc.
Filing Date: 2025-03-24
Form: 10-K
Item: Item 7
Chunk 124
---
 federal funds rate from 5.25-5.50% as of the beginning of 2024 to 4.25-4.50% as of the end of 2024. This was welcome news for many investors, however continued uncertainty in inflation and employment data put a bit of a damper on the rate cut momentum and future rate expectations continue to demonstrate volatility. Additionally, expectations for the new U.S. presidential administration are mixed. Overall, 2024 was a much more constructive environment compared to 2023. Expectations for the extent and magnitude of continued rate cuts in 2025 are mixed, however capital markets seem to have gained momentum and the degree of uncertainty is of a lower magnitude than that of the previous two years.

The two-year Treasury yield capped off 2024 flat compared to the end of 2023 at 4.25%. The five-year Treasury yield, however, increased by approximately 54 basis points, from 3.85% as of the end of 2023 to 4.39% as of the end of 2024. The ten-year Treasury yield increased by approximately 70 basis points, from 3.88% as of the end of 2023 to 4.58% as of the end of 2024. Notably, the five and ten-year Treasury yields are no longer inverted, ending 14 and 33 basis points, respectively, higher than the two-year Treasury yield as of the end of 2024 after finishing 2023 40 and 37 basis points, respectively, below the two year Treasury yield as of the end of 2023. Over the course of 2024, the two-year Treasury saw yields ranging from a high of 5.05% and a low of 3.55%, the five-year Treasury observed yields ranging from a high of 4.73% and a low of 3.41%, and the ten-year saw yields ranging from a high of 4.71% and a low of 3.62%. Notably, all tenors of the Treasury yield saw their annual low rate in September 2024 before increasing again to end the year.

Residential mortgage rates have proven to be sticky in light of federal funds rate cuts, with the average conforming 30-year mortgage rate increasing by 24 basis points to 6.85% as of the end of 2024 compared to 6.61% as of the end of 2023. However, the