I have had some interesting, if not shocking conversations with multiple sources over the last several days to the effect of: “I’ve heard that mortgage rates have gone down over the last several days.”
To be frank, as of yesterday the US 10-year Treasury yield has increased by over 32 bases points in the last several weeks. That is, a little over two weeks ago the 10-year had a yield of around 1% and now its yield is now trading around 1.328%, that is an increase of almost 25% in a noticeably short period of time.
You might ask, what does it matter what the US 10-year Treasury yield does and what does that have to do with mortgage rates? It matters because traditionally the US 10-year Treasury yield is the closest economic indicator as the direction mortgage rates will move. That is, if the US 10-year Treasury yield moves higher, than the interest rates on all mortgage types will rise. So, you can understand why this move in the US 10-year has caused a very noticeable spike in mortgage rates.
Most economists believe that for the most part yields will remain where they are for a while, but there is still a lot of volatility in both the bond and equity markets, so hold on, as the ride is far from over. If you have any questions regarding this information, give us a call at Trust Mortgage, ‘we’re here to help.”