Monday, November 18, 2019

Mortgage Rates and Ten Year Yield

by Calculated Risk on 11/18/2019 01:17:00 PM

With the ten year yield at 1.81%, and based on an historical relationship, 30-year rates should currently be around 3.75%.

As of Friday, Mortgage News Daily reported: Much Better Week For Rates, But Bigger Picture Risks Remain

Mortgage rates finished the week in much better territory compared to last Friday. Today only added modestly to that move, but the simple act of moving in a friendly direction feels like a major victory after coming toe to toe with the highest rates in more than 3 months (last week). [30YR FIXED - 3.75-3.875%]
emphasis added
The graph shows the relationship between the monthly 10 year Treasury Yield and 30 year mortgage rates from the Freddie Mac survey.

Mortgage rates and 10 year Treasury YieldCurrently the 10 year Treasury yield is at 1.81%, and 30 year mortgage rates were at 3.75% according to the Freddie Mac survey last week - about as expected.

The record low in the Freddie Mac survey was 3.31% in November 2012 (Survey started in 1971).

To fall to 3.31% on the Freddie Mac survey, and based on the historical relationship, the Ten Year yield would have to fall to around 1.4% (but there is some variability in the relationship).