So you've decided to sell your house. You've hired a real estate professional to help you with the entire process, and they have asked you what level of access you want to provide to potential.
MORTGAGES | How to Know Where Mortgage Rates Are Headed
Dated: February 24 2022
We are still in the beginnings of 2022, and mortgage rates continue to increase. But, why is this significant? An increase in mortgage rates impacts your buying power, making purchasing a home more expensive.
Every Thursday, Freddie Mac releases its Primary Mortgage Survey. On February 2, the survey showed the average fixed-rate mortgage rose from 3.22% to 3.55%. The table below shows how rising interest rates affect buying power:
Understanding the correlation between how the treasury yield moves and how mortgage rates follow matters. Observing the 50-year history of the 10-year treasury yield and following its path shows where mortgage rates will go. The graph below shows that relationship over the past 50 years.
The treasury yield began to climb as we entered the new year, and that has caused rates to increase. On January 27, the treasury yield was 1.74% below the mortgage rate of the same day (3.55%). The average spread between the mortgage rate and treasury yield was 1.74%, close to the average space of 1.7%.
Where Is the Treasury Yield Heading in the Future?
As you can see, a 10-year treasury-yield forecast could be a clue to whether mortgage rates go up or down.
The Wall Street Journal's survey of a panel of academic, business, financial, and economic experts predict the treasury yield will be as high as 2.84% by December 2024. Sticking with the 50-year history of the treasury yield puts mortgage rates near 4.5% by 2025.
Although the correlation between the 30-year fixed mortgage rate and the 10-year treasury yield is apparent, it shouldn't be used as a precise indicator. They're both hard to forecast, but understanding the relationship between them can help you get an idea of where rates may be heading. Based on our information, it looks like mortgage rates will keep rising for a few years.
If what is presented is correct and you've considered your financial ability, your best bet could be not to postpone buying a home.
As a native of Washington DC, Wendy brings extensive knowledge of the area. She consistently shows the aptness to satisfy clients who buy a house or sell a home in the cities of Washington DC, Bowie, ....
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