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Mortgage Rates Predicted To Be At Pre Recession Levels Over The Next 24 Months
Mortgage Rates Officially Highest in at Least 5 Years
Mortgage rates edged up to 4-year highs with yesterday's bond market losses and things went from bad to worse today. Bond markets (which underlie and directly affect rates) are under extreme pressure today and have generally had a very bad September. Weakness in bonds equates to higher rates.
So why are bonds weak?
In part, this is weakness that was expected way back at the beginning of the year as the tax bill came to fruition and as economic data continued to suggest ongoing expansion. Given that the inflation/growth outlook was a whole lot worse in 2013 and early 2014 when 10yr Treasury yields briefly crested 3.0%, it stood to reason that those same yields would almost certainly need to move well over 3.0% this time around (inflation/growth are key factors in Treasury yields and rates in general).
After hitting 3.13% in May, 2018, 10yr yields calmed down and managed to hold under 3% ever since, with a few moments of modest exceptions. Today presents the most serious attack on the 3% ceiling since then, and it begs the question of whether we'll see those previous highs tested.
Things are slightly worse for mortgage rates, which only generally follow the 10yr Treasury yield. Back in May, mortgage rates were a little better than they are now, relative to 10yr Treasuries. As such, today's rates are the highest in at least 5 years for some lenders (there were a few days in the middle of September 2013 that were worse) and the highest in 7 years for any other lenders.
What does this mean for Mortgage Rates and Down Payment assistance?
Rates will continue to go up for the next two years are the economy continues to break records day in and day out. If you are looking to buy a home in the next 24 months, it would be better to buy and lock in vs pay a higher rate for the next 30 years.
If you would like an idea of what rates are today, feel free to text or call us at 612-508-4100
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Mortgage Rates Officially Highest in at Least 5 YearsDecrease Font SizIncrease Font SiMortgage rates edged up to 4-year highs with yesterday's bond market losses and things went from bad
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