Victory For Rates; Hope For Housing Inventory?
Posted To: Mortgage Rate Watch
2021 hasn’t been a great year for mortgage rates–at least not as far as their trajectory is concerned. But that could be changing . Even if things don’t get any better from here, the past 3 weeks are collectively the best we’ve seen since January. Mortgage rates are primarily driven by day-to-day movement in the bond market. There is a particularly strong correlation between 10yr Treasury yields and mortgage rates. While this definitely wasn’t the case for much of 2020, the correlation is now generally back intact. As such, the ability of 10yr Treasury yields to remain under a ceiling of 1.75% has coincided with resilience in the mortgage market. If we zoom in on the blue line, we can see 10yr yields departing their prevailing trend for 2021 and starting to move sideways in recent weeks. It…(read more)