New York Commercial Real Estate Values

Mortgage Rates: Do Treasury Yields Indicate Still Lower Rates Ahead?

Mortgage Rates: Do Treasury Yields Indicate Still Lower Rates Ahead?
Mortgage Rates - "Mortgage rates held steady this week at 3.65 percent for a 30-year, fixed-rate loan. It’s the first time all year that rates didn’t fall ..."

Do Treasury Yields Indicate Still Lower Rates Ahead?

Mortgage Rates vs Treasury Yields | | Brion Costa | Steve Gaghagen

Home Loan Rates Usually Follow Treasury Bond Yields Will This Hold True Again?

We've been predicting in these pages that you could pretty much rely on continued home loan prices in the "relatively low" range for the near future. Here comes an indicator that confirms that predicition, but also says we may see even lower mortgage rates here in the near future. If you've been sitting on the sidelines waiting for the "perfect moment" (not a good strategy to try to pick the bottom or top of any market, by the way), then you may just see it here over the next coupld of weeks. Treasury Bond Yields are usually a good indicator of where the mortgage market is going. Home loan rates seem to follow the Treasury  yields pretty closely. As you can see in the chart above, Treasury yields have fallen signifigantly since the beginning of the year. Home loan rates have too, but they've not kept pace with the bond yields. This is a good indicator that we may see even lower home mortgage loan prices ahead in the near future as the two markets attempt to come back to a more normal balance. Here's an article by Lorraine Woellert. Lorraine is an analyst with Redfin and a contributor to Forbes, where this article appeared.

Mortgage Rates: Will They Follow Treasuries Even Lower? | Forbes

So what about mortgages? Look at how quickly Treasury yields are falling compared to mortgage rates. The yield on the 10-year Treasury has dropped 54 basis points since the beginning of this year. Mortgage rates have fallen only 36 basis points, according to Freddie Mac.
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Is History A Good Indicator Of Performance In Home Loan Rates?

So, is history a good indicator of what we can expect in the near term in mortgage rates? The short answer is "yes". History is a good indicator in all markets when it comes to predicting what they'll do in the future. I know it sounds old fashioned, but there really is nothing "new under the sun". All markets are creatures that repeat the same actions again, and again, and again ... with an occasional explosion of unexpected deviance from the norm. The funny thing is that after most of those abnormal variances we can look back and say, "Oh, sure! We should have seen that coming"! Barring anything like that right here in this situation ... and I don't see anything like that coming here ... we can see the possibility of even lower home loan rates in the very near future ... say the next week or two. How long things will last at that lower level would be anyone's guess. We'll keep our eyes out for two things here: 1) If and when these lower mortgage rates actually do materialize and come into alignment with the Treasury Yields; and, 2) Any indicators after that of when those rates might start climbing once again ... and how far how fast.. Mortgage Rates

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