The average homebuyer may see mortgage rates rise as much as a quarter point on a 30-year fixed rate mortgage, Matthew Graham, COO of Mortgage News Daily told CNBC.
Mortgage rates roughly follow the yield on the 10-year Treasury. And
today, the bond sell-off accelerated, pushing the 10-year Treasury yield
up 11 basis points to 0.94%, its highest since March 20.
“I expect mortgage lenders will price more aggressively as refinance
volume tails off in response to even slightly higher mortgage rates,”
said Mike Fratantoni, chief economist at the Mortgage Bankers
Association.
For now the news looks good for mortgage REITs: iShares Mortgage Real Estate Capped ETF (BATS:REM) climbs 8.4%; by name, MFA Financial (MFA +36.9%), Invesco Mortgage (IVR +30.9%), Western Asset Mortgage (WMC +26.1%), Arlington Asset (AI +16.6%), Chimera Investment (CIM +9.6%) post double-digit percentage gains.
Still, markets can swing in a blink of an eye. “Things can change,
but until and unless they do, you have to treat last week’s all-time low
rates as the bottom of the market,” Graham said.
https://seekingalpha.com/news/3580838-mortgage-rates-poised-to-jump-treasury-yield-climbs
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