Mortgage rates creeping up
According to CNBC this morning, the yield on the 10 year Treasury bond moved up dramatically this morning causing some concern that mortgage rates (closely tied to the yield on the 10 year bond) are following. Best mortgage rates quoted this morning are between 4% – 4.53%.**
Last week, we saw the yield on the bond about 10 basis points lower than this morning, and of course, this could be a concern for our very robust housing market here in the Portland metro area.
Why did the 10 year bond yield rise so much this morning? This was mostly driven by international news:
- The Greek bail out
- Chinese markets on the rise
- Iranian nuclear deal looks like it might be a go this time
All of these international crises that have been heavily weighing on US stock markets, look like they might be averted finally. Could this be the combination of events that will lead the Feds (led by Federal Reserve Chairman Janet Yellen) to raise over-night bank rates in their September meeting? This would most certainly be a signal that mortgage rates will move up in tandem.
According to the chart above, we are very near the high yield for the 12 months.
** Best 30 year rates on conventional financing are for those with 740 credit scores and 20% down payments. Rates are similar for FHA financing but also include PMI.