Rates wait for the inevitable

Rates have come down from Friday’s highs thanks to declining Treasury yields. However, they are still higher than they were last week; the 30-year fixed rate mortgage is up 6 basis points at 3.25% while the 15-year mortgage is up 5 basis points at 2.62%.  

current outlook:

After Treasury Secretary Yellen commented that inflation wouldn’t return to 2% until the end of 3Q in 2022, Treasury yields dropped from 1.673% to 1.612%. While the 10-Year Treasury note keeps testing the limits, so far it has managed to stay below the 1.776% ceiling last seen back in March. However, with the Federal Reserve meeting (and its promise of reduced bond buying) just around the corner, the end of October may spark more volatility. What this means for mortgage rates is a lack of interest in other economic news until the FOMC meeting has passed. Rates hit 6-month highs last week, but have been in recovery since. Should bonds drop next week, lenders may also be persuaded to bring down rates as well. On the housing side, new home sales skyrocketed in September with 14.0% monthly growth mainly in the Northeast and South regions. 

Rates wait for the inevitable

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