From Realtor Magazine Online, Daily Real Estate News May 28, 2009
Mortgage rates rose yesterday to a six-month high. This spike occurred after the gap between yields on two-year Treasury notes and 10-year notes, called the yield curve, widened to 2.75 percentage points, its highest ever.
To keep mortgage rates low, the U.S. Treasury has been buying mortgage-backed securities and Treasurys. But as short-term yields rose, the Treasury failed to intervene. The net effect is higher rates on short-term bonds that make mortgage-backed securities less attractive.
That drove the average 30-year mortgage rate up to 5.29 percent from 5.03 percent the previous day, according to HSH Associates, a mortgage-data publishing firm.
What’s next seems unclear. Marcus Huie, Treasury's strategist for Deutsche Bank AG, believes the government will intervene to keep mortgage rates low. "The market is testing the Fed to hold the current yield levels,” he says.
Source: The Wall Street Journal, Liz Rappaport (05/28/2009)
Subscribe to:
Post Comments (Atom)
.jpg)
No comments:
Post a Comment