Mortgage Blog

Why did the 10-year Note yield drop so much but home loan rates didn't?

June 1st, 2019 10:54 AM by Eric Fang

Home loan rates are driven by the trading activity of mortgage-backed securities, and not how the 10-year Note yield moves. 

When there is global unrest like we have seen this past week, investors around the globe look to park their money and investments into the "safe-haven" of the US Dollar by purchasing the US 10-year Note. Hence the reason for the larger decline in 10-year Note versus mortgage backed-securities and home loan rates. 

I copied above from a magazine I subscribed. But there is another reason, the current Fed fund rate is 3.5%. If we expect much lower rate from the current level, Fed has to lower the interest rate first.
Posted in:General
Posted by Eric Fang on June 1st, 2019 10:54 AM

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