Given the prospect for further rises in rates, borrowers holding ARMs may be well advised to heed our refi advisory.
A light economic calendar, a stock market which seems to have topped out for the moment, and a late-week selloff in the Treasury market -- which pushed 10-year Treasury yields to five-year highs before falling back by week's end -- all contributed to the increase in mortgage rates, particularly this week. As has been the case over the last couple of weeks, economic news has been mixed, but flashes of stronger growth have become clearly evident.
Costa Mesa, CA
Not to be a smart ass, but the 10-year Treasury yield has nothing to do with mortgage rates.
Mortgage rates are directly tied to Mortgage Backed Securities (MBS) which trade on the bond market. Many times the MBS go in one direction, while the 10-year Treasury goes another.
It's a common misconception, and even people on CNBC who are supposed to know this incorrectly say that the 10-year treasury going up is causing rates to increase.
What caused MBS to trade lower were the fears of global inflation and the market being nervous about the foreign Central Bank rate increases.
Also, Asian investors are buying less US bonds, which is bad because they have been huge purchasers of them in the past.
Galel Fajardo, CMPS™
President, Coast Mortgage Group
Jun 12, 2007 01:58 PM
Rosemont Financial Inc - Simi Valley, CA
Simi Valley Real Estate
Galel you are right about the 10 year bond not being a directly related to mortgage rates, however it is a good measure of what rates are doing.
Jun 12, 2007 02:05 PM
Rainmaker
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Jeff Schraeder
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