The 10 Year note is down to 3.13 as I write this. This is it's lowest level ever. Does this mean we are going to return to 30 year mortgage rates in the high 4's to low 5% range? Maybe, maybe not.
We are watching history unfold right before our eyes. Historically low bond yields coupled to a banking system that is virtually bankrupt. What does this mean to mortgage rates, that is the answer we would all like to know. In vestors are fleeing the stock market for the perceived safety of the bond market. Commonly referred to as flight to quality. This may actually work in our favor as the amount of debt the government needs to float can be potentially had a low interest cost.
Whether this translates into lower mortgage rates will be determined by how the mortgage backed securities are perceived by investors. Even with a gain of 30/32 on the 30 year bod mortgage backks are only up 3/32.
Stay tuned and I'll let you know how we fare. Good luck out there.
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