Article Summary
Mortgage rates recently hit a three-month high due to concerns over fiscal spending, as higher spending requires increased Treasury issuance, pushing rates upward. Although the House passed a spending bill, the Senate’s delay in finalizing it allowed financial markets to pause, with some investors finding US Treasury yields increasingly attractive. This buying pressure has slightly lowered mortgage rates, though they remain above 7% for top-tier 30-year fixed mortgages.
What This Means for You
- Expect mortgage rates to remain volatile in the near term due to fiscal policy uncertainty.
- Consider locking in a rate now if you’re planning a home purchase, as rates could rise again.
- Explore refinancing options if your current mortgage rate is significantly higher than today’s rates.
- Monitor Treasury yields for insights into future mortgage rate trends.
Mortgage Rates Edge Down From Recent Highs, But Remain Over 7%
Mortgage rates hit their highest level in just over 3 months yesterday with financial markets generally protesting the absence of more serious spending cuts in the spending bill. Rates care about fiscal spending because higher spending requires higher Treasury issuance which, in turn, pushes rates higher, all else equal.
Although the House passed the bill early this morning, financial markets were already fairly well braced for the impact. Now that the Senate is saying the bill likely won’t reach the President’s desk until late Summer, markets are able to pause and reflect.
One conclusion that some investors are coming to is that yields on US Treasuries are increasingly attractive as they move up through the 4% range (and in the case of 30yr bonds, the 5% range). When investors buy more bonds, it puts downward pressure on rates.
As far as today was concerned, it didn’t amount to much in terms of movement versus yesterday. The average lender is just a hair lower, but still over 7% for top tier 30yr fixed scenarios.
People Also Ask About
- Why are mortgage rates rising? Mortgage rates rise when Treasury yields increase due to higher fiscal spending and Treasury issuance.
- Will mortgage rates go down in 2023? It’s uncertain, but rates may stabilize or decrease if Treasury yields become more attractive to investors.
- Should I lock in my mortgage rate now? Locking in now could be wise if you’re concerned about potential future rate hikes.
- How do Treasury yields affect mortgage rates? Higher Treasury yields typically lead to higher mortgage rates, as they influence investor demand for bonds.
Expert Opinion
The recent volatility in mortgage rates underscores the importance of fiscal policy on financial markets. While rates have edged down slightly, they remain elevated, signaling that borrowers should remain cautious and proactive in their financial planning. The interplay between Treasury yields and mortgage rates will continue to be a critical factor to watch in the coming months.
Key Terms
- Mortgage rate trends 2023
- 30-year fixed mortgage rates
- US Treasury yields impact on mortgages
- Fiscal policy and mortgage rates
- Refinancing during high mortgage rates
ORIGINAL SOURCE:
Source link
Automatic Mortgage Calculator
Welcome to our Automatic Mortgage Calculator 4idiotz! Please just add your figures in the correct sections below and the Automatic Mortgage Calculator will automatically calculate the results for you and display them at the bottom of the page.
