"The 10-year yield closed below 4% for the first time this year on Thursday, sending mortgage rates closer to year-to-date lows after a credit market scare. But this begs the question: have mortgage rates already priced in a lot of the economic news? Bond traders on Friday were less fearful of the Zions Bank $50 million loan default and sent yields just a tad higher back to 4%."
"Remember, 65%-75% of where mortgage rates and the 10-year yield can go in any economic cycle is still Federal Reserve policy. Below is a chart of what I call the slow dance between the 10-year yield and the 30-year mortgage rate, which explains the relationship between the two data lines. Given what we've seen so far this year on mortgage rates, the economy and the bond market, can mortgage rates go lower from here and hit the bottom end of my forecast for 2025?"
"In my 2025 forecast, I anticipated the following ranges: Mortgage rates between 5.75% and 7.25% The 10-year yield fluctuating between 3.80% and 4.70% We are approaching my lower-end forecast for 2025. The 10-year yield closed below 4% Thursday and reached as low as 3.94% in overnight trading. This follows the low in April when the 10-year yield dropped to 3.87% during overnight trading after the Godziilla tariffs were announced."
Mortgage rates are approaching the lower end of the 2025 forecast as the 10-year Treasury yield dipped below 4% and reached 3.94% in overnight trading. Forecast ranges for 2025 place mortgage rates between 5.75% and 7.25% and the 10-year yield between 3.80% and 4.70%. Mortgage pricing sat near 6.23% (Mortgage New Daily) and 6.36% (Polly locked). A recent credit-market scare tied to a Zions Bank $50 million loan default briefly moved yields, but traders pushed yields back toward 4%. Federal Reserve policy still accounts for roughly 65%-75% of rate direction, and further weakening of the economy or Fed cuts could push rates lower.
Read at www.housingwire.com
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