On May 26, 2009, shock waves hit the mortgage market as interest rates shot up after dipping into the 4 percent range for 30-year fixed-rate conforming loans. On May 29, the bond market rallied, lowering mortgage rates by about half of the previous days’ increase.

This was followed by another rate hike as investors demanded higher interest rates on long-term government debt. Interest rates on 30-year fixed-rate home mortgages are tied to the 10-year Treasury rate.

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