Long-term rates are rising today, the all-important 10-year Treasury suddenly above the 3.16-3.28 percent range that gave us sub-5 percent mortgages for the first time since spring. Gone now, pushing 5.125 percent, the 10-year trading 3.37 percent at this moment. Ordinarily, a range breakout like this would signal a run to the top of the old range, 10-year Treasurys testing 4 percent as in summer, mortgages at 5.75 percent. However, nothing in this moment is ordinary -- not remotely predictable with normal tools. In the short-run dynamics of supply and demand, the brief interval of sub-5 percent ignited refinance and purchase mortgage applications -- up 18.2 percent and 13.2 percent, respectively, last week. As there is no private investor demand for mortgages, once borrowers overshot the Fed's constant purchase volume, rates had to rise to choke off applications. The surge in purchase applications was the first since spring, which says a "four" prefix is requi...
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