Industry News

Mortgage rates headed below 6%?

10-year Treasury notes drop as investors flee stocks

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Yields on 10-year Treasury notes dropped below 4 percent for the first time in two-and-a-half years Monday, as investors pulled money out of equities for the safe haven of bonds. Yields on the 10-year Treasury note fell to 3.83 percent Monday, down from a recent high of 5.26 percent on June 12. The 10-year Treasury note is closely watched in the real estate industry because it tends to track with interest rates on 30-year fixed rate mortgages. While yields on 10-year Treasury notes have been falling faster than 30-year mortgage rates -- the spread between them has increased from 1.5 percent in June to more than 2 percent this month -- 30-year mortgage rates are headed down, and are nearing 6 percent. Freddie Mac last week reported that interest rates on 30-year fixed-rate mortgages averaged 6.2 percent with an average 0.5 point, down from a recent high of 6.73 percent in July. Last week's average rate was the lowest since May, when lender's charged an average of 6.15 per...