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Mortgage Rates and the 10 Year Treasury Yield
Posted on 4/4/25 at 9:38 am
Posted on 4/4/25 at 9:38 am
I've always heard that mortgage rates follow the 10 year treasury yield more closely than the fed funds rate.
The 10 year treasury yield has slipped to 3.906%
How much further can thing go down?
Based on the 30 Year Fixed vs. 10 YR Treasury chart here once the 10 year yield got to around 2.5% we got sub 5% mortgage rates. Does anyone think (wish
) we're headed there?
The 10 year treasury yield has slipped to 3.906%
How much further can thing go down?
Based on the 30 Year Fixed vs. 10 YR Treasury chart here once the 10 year yield got to around 2.5% we got sub 5% mortgage rates. Does anyone think (wish
) we're headed there? This post was edited on 4/4/25 at 9:40 am
11
Posted on 4/4/25 at 9:48 am to Sterling Archer
I've heard Fannie and Freddie on the commercial side have gotten pretty aggressive with spreads. Not sure how it's going to go for resi.
Posted on 4/4/25 at 10:11 am to Sterling Archer
Give it a some months. The fed should drop rates unless they play politics. You should get sub 5% before you know it.
Posted on 4/4/25 at 10:15 am to Sterling Archer
3.6-3.8 by the end of the year
Rates were sub 5 on FHA with good credit when the 10yr was at 3.7 in Sept
Rates were sub 5 on FHA with good credit when the 10yr was at 3.7 in Sept
Posted on 4/4/25 at 10:18 am to SDVTiger
quote:
3.6-3.8 by the end of the year
Rates were sub 5 on FHA with good credit when the 10yr was at 3.7 in Sept
Bookmarking this. Wanna ban bet?
Posted on 4/4/25 at 10:22 am to Boss
Put away your calculators, boys. We are all friends here.
Posted on 4/4/25 at 10:25 am to Sterling Archer
Trump said he would lower mortgage rates. I’ve seen some mention tanking the economy is one way to do it, so maybe ?
I’d selfishly welcome it as we will be looking to move within the next year or two. Don’t love the beating my portfolio is taking, but I’m also 25 years from retirement.
I’d selfishly welcome it as we will be looking to move within the next year or two. Don’t love the beating my portfolio is taking, but I’m also 25 years from retirement.
Posted on 4/4/25 at 10:35 am to jordan21210
I’m at a 6.3% rate so anything in the 4’s would be awesome. I’ve 30 years left on my mortgage and owe around 670k so it would save me a good amount in interest.
Posted on 4/4/25 at 10:38 am to Boss
quote:
Bookmarking this. Wanna ban bet?
Sure
Posted on 4/4/25 at 10:45 am to Sterling Archer
A good rule of thumb is to take the 10 year and add 2%, and that's what you can usually get a 30 year mortgage for.
Posted on 4/4/25 at 10:46 am to Sterling Archer
quote:
I've always heard that mortgage rates follow the 10 year treasury yield more closely than the fed funds rate.
Fixed rate mortgages are benchmarked off the 10-yr Treasury. They don’t follow the Fed Funds Rate like variable/short term rates do.
They generally move in the same direction because they have a spurious correlation (other factors drive both), leading people think Fed rate cuts lower fixed rate mortgages.
Posted on 4/4/25 at 10:47 am to jordan21210
quote:
I’d selfishly welcome it as we will be looking to move within the next year or two. Don’t love the beating my portfolio is taking, but I’m also 25 years from retirement.
I'm kind of in the same boat with time to retirement and selfishly wanting to refinance from when we purchased in 2023.
But my wife and I both receive stock compensation as a part of our total salary. Right now we'll make about $25k less this year based on current stock prices from where they were in January. I'm just praying we don't lose our jobs
Posted on 4/4/25 at 10:54 am to Sterling Archer
quote:
receive stock compensation as a part of our total salary
The only time you should ever accept such a deal is if it's an established company in an industry vital to society and you're indepensable to the company
Also EFFR is ~the rate the Fed lends to banks, as it goes FED->Reserve Banks->other banks in that district->interbank lending(overnight). Prime rate is generally EFFR + ~3%
This post was edited on 4/4/25 at 12:26 pm
Posted on 4/4/25 at 12:08 pm to Sterling Archer
quote:
once the 10 year yield got to around 2.5% we got sub 5% mortgage rates. Does anyone think (wish ) we're headed there?
I can see low 5s
Ive been in same home for 10yrs and at 3% Lots of equity and we’re in the market as current House has become to small with 2 kids. I won’t be upset about 3% rate to 5s
Posted on 4/4/25 at 12:13 pm to bstew3006
quote:
Ive been in same home for 10yrs and at 3% Lots of equity and we’re in the market as current House has become to small with 2 kids.
Slightly off topic, but consider that in a blink of an eye they will be grown and gone, then you'll be looking to sell that McMansion and get back into something like you have now. Consider skipping the McMansion phase of life and riding out the very nice situation you are in now.
Posted on 4/4/25 at 1:02 pm to bstew3006
quote:
I won’t be upset about 3% rate to 5s
Spring market has brought a lot of nice houses on market near us and the bigger ones are sitting. If I could reliably get like 5.25 on a 30 year with ability to buy down rate through bank incentives, I’d be pushing my wife a lot harder to list our house and make the jump. Until then, gonna hold our current which is a 10 year arm at 3.2.
Posted on 4/4/25 at 1:21 pm to SDVTiger
quote:
3.6-3.8 by the end of the year Rates were sub 5 on FHA with good credit when the 10yr was at 3.7 in Sept
You’re calling for 3.6-3.8% on the 10y or mortgages?
Posted on 4/4/25 at 2:33 pm to jordan21210
quote:
Trump said he would lower mortgage rates. I’ve seen some mention tanking the economy is one way to do it, so maybe ?
So here is some galaxy brain stuff that I don't think Trump is intentionally doing himself, but maybe Bessent is.
You've got 3 key factors in home affordability:
Incomes
Home Prices
Mortgage rates.
I saw a post on X the other day that said to get back to pre-pandemic afforability levels you need one of the following:
Incomes go up 60%
Housing prices drop 40%
Mortgage rates drop 4.5%
The most easily manipulated thing on that list is mortgage rates. But if rates drop, houses will go up again. Not enough to completely offset a theoretically 4.5% rate drop, but they will rise.
But what if you get rates to fall like a rock during a time of economic uncertainty? Prices won't rise enough to offset the affordability gains. And then once the economy is doing better prices will gradually rise instead of jumping like they would if we were humming along and eventually rates were in the high 3's again or something.
So basically you take actions that you know create economic uncertainty... tariffs and sweeping government cuts.... you refinance the government debt at lower rates plus you address housing in the meantime. The stock market will go up again, as it always does eventually barring a complete societal collapse where money won't mean anything anymore anyway.
Do I think that is this 4D chess manuever the administration is doing? Not necessarily. Could it happen? Yeah, I could see it.
Posted on 4/4/25 at 2:42 pm to Sterling Archer
Spreads have been consistently 300 bps for the past year
Posted on 4/4/25 at 3:20 pm to Sterling Archer
What 30 fixed are you guys seeing now? Looking for high 4s
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