The yield on the 10-year Treasury note fell to the lowest level on record — likely driving down fixed interest rates on home loans near their all-time lows.
Global uncertainty over Great Britain’s recent vote to depart from the European Union
dragged down stock prices, oil prices and bond yields Tuesday.
Data from the Department of the Treasury indicate that the yield on the 10-year Treasury note plummeted to
1.37 percent as of today’s market close.
That was 9 basis points less than Friday and the lowest 10-year yield on record.
While historical Treasury data indicated that the 10-year yield bottomed out at 0.43 percent on July 12, 2012, published reports say that the previous record-low was
around 1.40 percent during July 2012.
Long-term fixed mortgage rates tend to move with the 10-year yield.
Freddie Mac reported in its Primary Mortgage Market Survey that 30-year fixed rates averaged 3.48 percent in the week ended June 30.
Based on a Mortgage Daily analysis of Treasury market data, fixed mortgage rates could be around 11 BPS or so lower in this week’s survey from Freddie.
The most-recent decline will likely leave 30-year fixed rates just above
the record-low 3.31 percent reached in the week ended Nov. 21, 2012.
The news is good for loan originators that rely on refinance business and bad for mortgage servicers that will have to write down the fair value of the mortgage servicing rights as loans they service pay off.
