Posted To: Mortgage Rate Watch

You might think you know mortgage rates. You might make assumptions about where they’ll go and what they’ll do based on past precedent. For decades, you may have done a nearly flawless job of that simply by drawing the exceedingly logical conclusion that mortgage rates tend to behave a lot like other longer-term bonds. After all, bonds and mortgages are both loans. They’re both fixed income investments. And to cap it all off, the average mortgage “becomes” a bond, in a manner of speaking, with its underlying cash flow being traded alongside the most quintessential bonds like 10yr Treasury Notes. That’s why 10yr Treasury yields and mortgage rates move in the same direction at the same time with regularity that puts clocks to shame. So it’s understandable that anyone familiar with this dynamic…(read more)

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Source: Mortgage News Daily