Each day the Research staff takes a look at recently released economic indicators, addressing what these indicators mean for REALTORS® and their clients. Today’s update highlights the 10-year Treasury and mortgage rates.

  • The 10-year Treasury borrowing rate has been inching up in the past week, though it still remains at nearly historic lows.  Today’s rate of 2.15 percent is up from 1.8 percent just a week ago.  The rise of 35 basis points (215 minus 180, in financial market lingo), should generally lead to an equal rise in 30-year fixed mortgage rates.  Last week’s mortgage rate was an all-time low of 3.96 percent.  So this week’s rate could be somewhat higher than that and will likely cross over to being in the low 4s.
  • A slight upward move of this magnitude should not have any meaningful impact in the current environment.  Consumers recognize the super-low mortgage rates of today’s market even with small changes.  What is important isn’t the rates but the underwriting standards, which are way too conservative with only the top tier segment of society getting loans and leaving out a sizable portion of middle-class families.
  • It is also possible for the mortgage rates to not rise because the spread between the 10-year Treasury and 30-year mortgage was wider than usual in the past few weeks.  So the rise in government borrowing but no rise in mortgage rate is just a return to normal.