Recently, a few of my friends asked me why the mortgage rates haven’t really come down since the Federal Reserve just reduced the Federal Funds Rate by 50 basis points. And the short answer is…. The current mortgage rates had already built in and accounted for the rate cut. This being said, there is a tool that I refer to on a daily basis… the 10 Year Treasury Note/Bond (AKA 10-year T-Bill). This particular bond gives us a good idea of where the mortgage rates are (not exactly but closely). For instance, in April of this year the 10-year T-Bill was at 4.67% and a conforming 30-year fixed mortgage rate was at 7.22%. And today, the 10-year T-Bill is at 3.763% while the conforming 30-year fixed mortgage rate is at 6.059%. So, the 30-year mortgage rate has come down a little more than 1 percentage point in about a 5-month span. The correlation isn’t exact because there are other factors…ie. inflation, unemployment, inventories (and others), but by following the 10-year T-Bill, you will have a good idea as to which direction the mortgage rates are trending.
Pro Tip…whether you are a potential buyer or seller, it is always good to know which way the mortgage rates are trending. AND as you manage your money, it’s good to know this as well (consult your professional financial advisor for this).
Fun Facts: Rosh Hashanah is on Oct. 2nd and Yom Kippur starts on the 11th. / Oct. 14th marks Indigenous People’s Day/Columbus Day. / Halloween is Oct. 31st. / Fall is generally the Best time to plant Bulbs for spring flowers.
Please call me or the office if you (or anyone you know) are thinking about buying or selling real estate, it will be our honor and pleasure to help them get what they’re looking for.
