"Last week was already interesting as the 10-year yield closed at a key level and mortgage rates finished the week under 6%. However, with this weekend's attack on Iran, people are pondering what the outcome will be on Monday morning."
"Traditionally, when there was military conflict in the Middle East, people would expect money to flow into the U.S. dollar and the U.S. bond market as a safe haven, and oil prices would rise. But in the last few years, this really hasn't happened."
"With the midterms coming up, there isn't a fear of a long, protracted war with Iran, and Trump seems to like a quick fix and nothing too prolonged when it comes to military actions. We will keep an eye on Sunday night trading and what happens Monday morning."
Mortgage rates dropped below 6% last week as the 10-year yield reached a significant level, coinciding with weekend inventory falling and demand picking up. A military attack on Iran introduces new uncertainty for rate direction heading into spring. Historically, Middle East conflicts drive money into U.S. bonds and dollars as safe havens while raising oil prices. However, recent years show traders contain expectations, fearing no wider escalation. With midterms approaching and Trump favoring quick military actions, prolonged conflict seems unlikely. Bond markets and mortgage rates have remained relatively stable despite significant headlines this year. The Strait of Hormuz oil supply remains a key monitoring point. Forecasts anticipate mortgage rates between 5.75% and 6.75% with 10-year yields fluctuating between 3.80% and 4.60%.
Read at www.housingwire.com
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