Mortgage Rates on the Rise, Likely to Jump Again before Day-End
This week’s record-low mortgage rates might have been long-gone by the time most of us woke up this morning.
In a show of support for the shaky (at best) European economy, China announced this morning that it would not be reviewing its holdings of European debt (~2.5 Trillion). Not only is this announcement out of character for China, it shows confidence in a sector that few have shown optimism for.
This show of confidence in Europe’s financial future has investors moving even further away from the safety of Bonds and focusing on stock purchases. This immediate shift in the market, coupled with yesterday’s pessimism at the five-year bond auction, has begun to push mortgage rates up. As the day progresses, these two factors alone could raise rates by a minimum of 12 to 25 points.
The ten-year Treasury Bond is often hailed as the great indicator for mortgage rates – but you can’t believe everything you hear. This morning, the 10-year Bond change was almost double that of the 30-year market. You made some mistakes this morning if you expected the mortgage market and the ten-year bond to move at the same rate.
The impending seven-year Treasury Bond auction is going to be the kicker for today – Our expectation is that as demand for bond cools, today’s bond auction will drive mortgage rates even higher.
- Mortgage Pro Blog; Geoffrey Boyd; PrimeLending Clackamas OR