Treasury Bond Yields Slip to Record Low; Rise in Refinance Applications in Mortgage Activity
The housing market is still facing impacts from the Brexit vote with mortgage rates following long-term bond yields close to record lows in the current week.
One of the best gauges that indicate if the mortgage rates will rise or drop is the movement of the ten year Treasury bond. Generally when yields drop rates of home loan too slip.
Last week, the yields on long-term bonds took a deep plunge touching all times low and that indicated grave concerns which investors felt regarding the global economy.
On Tuesday, the ten year Treasury yields slipped to 1.37 percent noting an all times low. In January, it was 2.25 percent.
It is not that the U.S. bond yields alone took a dip, in Germany, U.K and Japan too, the yields on 10-year government bonds dropped to record lows.
According to weekly mortgage rate trend index Bankrate.com, most of the experts polled, expects rates to keep dropping in the week ahead. In case the employment reports by the government fails to meet expectations, the home loan rates might dip further.
In another instance, recent data from the Mortgage Bankers Association showed that, pushed by an increase in refinances, there was a rise in mortgage applications in the current week. In total mortgage activity, the refinance applications accounted for 61.6 percent which is the highest level noted in last five months.
New Zealand News
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