Mortgage News and Notes

Making Home Ownership More Affordable

June 5th, 2019 6:17 PM by Steven Hofberg

Bond Market Weakness Pushes Mortgage Rates Lower

From the RMC Newsletter dated June 4, 2019

Domestic financial headwinds and trade disputes, particularly the huge one between the US and China, have investors moving into “safe havens” like US Treasury bonds. The yield on the benchmark 10-year Treasury bond settled on Tuesday of last week at 2.268%, its lowest close since September 2017. Investors, analysts, and the Fed itself look to Treasury yields as a barometer of economic sentiment. Bond yields also factor heavily in the cost of debt for all types of borrowers, including home buyers. Few analysts see a risk of imminent recession, but many are predicting slower growth primarily due to disruptions of global trade caused by higher tariffs.

 

This economic stew does have its positives, one of which is its effect on mortgage rates. They generally track the 10-year bond yield, which has been falling substantially over the past few months. The impact on rates has likewise been substantial, falling a full percentage point in the last six months. This has made home ownership more affordable and it has opened the door to more borrowers who wish to refinance to lower their rate, take cash out, or recast an ARM that has or will soon adjust upward.

 

Steven H Hofberg,

Operations Manager

Posted by Steven Hofberg on June 5th, 2019 6:17 PM

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