The mortgage interest rate is determined by supply and demand, perceived risk of similar investments, and the general health of the overall economy. Bottom line, when the economy is strong and growing and health is evident, money flows into the stock market and rates go up to compete for investors. When the general economy is weak or uncertain, investors choose the safety of investments like bonds and interest rates go down.
Now that we’ve handled that, let me tell you about the historical relationship between the U.S. Treasury 10-year bond yield and the 30-year fixed rate mortgage. Historically the 30-year fixed sits 1.50% above the 10-year bond yield. Today the 10-year bond is yielding 1.60 percent. So if we apply the logic above, 1.60 percent plus 1.50 percent equals a projected 30-year fixed at 3.10 percent.
However, as you may have noticed, the 30-year rate isn’t quite down to 3.10 percent. I take this to mean that there should be a downward pressure on interest rates and we should expect a continued decline in rates.
When the economic news is good and our growth is unmistakable, our investors will move from the safety of bonds and the yield will go up. Make sure to get in now to take advantage of historically low interest rates.
Keep track of similar logic and insight like this article on our website, www.centralcoastlending.com or contact us today to learn how you can benefit from working with the mortgage experts at Central Coast Lending.
Creating an account is fast, easy, secure and FREE! Your account enables you to easily modify your loan application and view the status of your loan anytime day or night.
When you register for a Loan Center account, you can submit a loan application online and the sensitive information that you provide will be transmitted securely.
Pre approval can be done in as little as an hour if you have thoroughly completed the loan application and have all the needed paperwork to support the information on the application.
CCL Market Update: NFIB Small-Business Index The National Federation of Independent Business small business optimism index declined 0...
ISM Manufacturing Index Executives at service- oriented companies said the economy continued to run strong into October. The non-manufacturi...
Producer Price Index The wholesale cost of US goods and services snapped back in September, the level of inflationary pressure however has a...
PMI Manufacturing Index The PMI manufacturing index’s sample reported solid strength in September at a final 55.6 index, unchanged from th...
Chicago Fed National Activity Index The National Activity Index put out by the Chicago Fed, this index tracks overall economic activity as w...
Empire State Index Factories in the New York region of the US churned out goods at a slower but still prosperous pace in September. The Empi...
Consumer Credit Consumer borrowing picked up in July, total consumer credit rose $16.6 billion in July to a seasonally adjusted $3.91 trilli...
ISM Manufacturing Index Business conditions surged in August to a 14-year high as American manufacturers continue their success. The manufac...
Chicago National Activity Index A measure of the US economy from the Chicago Federal Reserve slowed in July from June’s robust performance...
Existing Home Sales Existing home sales ran at a 5.34 million seasonally adjusted annual rate in July, down 0.7% from June. This was the slo...
Survey of Consumer Expectations A monthly survey conducted on consumer expectations showed a notable pessimistic trend in the month of July....
Senior Loan Officer Survey About 17% of banks have eased standards and terms on business loans to large firms in the second quarter, while m...
Pending Home Sales US pending home sales rose 0.9% in June. The index tracks real estate transactions in which contract has been signed yet ...
Retail Sales U.S. retail sales climb again in June after a jumbo gain in the prior month of May. Sales at retailers such as auto dealers, re...
S&P Corelogic Case-Shiller HPI Case-Shiller home prices firmed in July, to a 0.3 percent adjusted gain for the 20 city index. The trend ...
Housing Market Index The housing market index fell three points in September to a level of 64, matching July as the weakest month of the yea...
JOLTS In the latest indications of strong, tight conditions in the labor market job openings rose to a higher than what was expected level o...
2nd Quarter 2017 (January-June) Scenic Coast Cambria Cayucos Los Osos Morro Bay The Scenic Coast of San Luis Obispo County represents the gr...
