Courtesy of Mish.
Curve Watchers Anonymous note the yield on the 10-year treasury note hit as high as 2.657% today, up a whopping 104 basis points since the early May low in yield of 1.614%.
$TNX: 10-Year Treasury Yield
The 10-year yield has been falling since the open today, but the overall rise since May has clobbered mortgage affordability.
Treasury Rise vs. Mortgage Rate Rise
My friend Michael Becker, a mortgage broker at WCS Funding Group writes …
Hello Mish
As bad as Treasuries are selling off, the sell off in MBS is much worse. I looked at some charts this morning and the prices of Fannie Mae and Ginnie Mae coupons continue to drop.
The FNMA 3.5 coupon was trading at 106 22/32 on May 2nd, and this morning it was trading at 99 9/32. Ginnie Mae is worse. The GNMA 3.5 coupon was trading at 109 1/32 on May 2nd, and this morning it was trading at 99 24/32.
In terms of interest rates, I locked an FHA purchase on May 2nd and the rate was 3.25%, and that rate carried a 2 point lender credit to help pay for closing costs. In order to get the same deal today, (a 2 point lender credit) the rate would have to be 5% today.
This as an apples to apples comparison illustrates that FHA rates have increased 1.75% in 7 weeks. You could get 4.625% on an FHA purchase, but you wouldn’t get any closing cost help.
I was locking well qualified borrowers at 3.50% on conventional loans (Fannie Mae) at the beginning of May, and now they are looking at 4.875%….
