30-Year Fixed Mortgage Rates Remain Low as 10-Year Treasury Yield Climbs

The yield on the 10-Year Treasury Note has risen from a low of 2.05% in December to its current level of 3.12%. At the same time, the 30-year fixed mortgage rate has remained near its lows over the last six months, only rising from 4.85% to 4.98%. If mortgage rates were rising at the same pace as Treasury yields, the Fed would probably have a real panic on their hands. With mortgage rates low, potential homebuyers are still attracted to lower borrowing costs. Let's hope they stay that way for the time being.

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Comments

[altaman:]

Fannie and Freddie and the Fed are using taxpayer money to pay artificially high prices for mortgage paper to keep the rates low. Just another high-priced flim flam brought to you by Robin Hood and his merry band.

Notice how these two fine institutions are already bleeding us dry? It will get worse as the value of this new paper gets severely marked down in the not to distant future.

May 14 07:52 PM

[It Figures:]

It would be interesting to see how this spread compares with the 10-20 year spread history. My impression is, but I am not sure, that since the mid '90's it has averaged near 180 bps. If that is correct, today's spread is tighter that during the panic of earlier in the year but can't really be considered tight vs. history.

There is good money to be made in mortgage lending today, with spreads wide and (new loan) credit quality better than in many, many years. Just look at Q1 mortgage origination profitability at the big mortgage players - JPM, BAC, WFC, etc.The wipe-out of the "crazies" over the last few years has signicantly changed the competitive landscape.

May 15 12:42 PM