Here is an excerpt from an article in The Wall Street Journal, October 10, 2019, entitled
“That Superlow Mortgage Rate? It Could Be Even Lower”.
Mortgage rates are closely linked to yields on the 10-year Treasury Note. The spread between the two has risen in recent months. Since the end of June, the Treasury yield has fallen about 0.4 percentage point, but the average mortgage rate has dropped just 0.16 percentage point. The gap between the two rates is near its highest in more than seven years, according to an analysis by Dow Jones Market Data. The average 30-year fixed rate for a mortgage this week is 3.57%, according to Freddie Mac. That is among the lowest average rates this year, but it has bounced up and down in recent months. Currently, the yield on 10-year Treasury Notes is 1.743%. The current gap indicates that mortgage lenders don’t have to lower the rates they offer as much to win business. Many say they are seeing bumper demand for mortgages, even without dropping the rates they offer in lockstep with Treasury yields. Though home sales have been lackluster, many borrowers who took out mortgages at higher rates last year have been refinancing.
Read the full article at: https://www.wsj.com/articles/mortgage-costs-outpaced-by-drop-in-interest-rates-11570699801