What is the direction of mortgage rates?
Seems to be down lately! But where next?
Track the current bond market here. Track the 10 Year Treasury yield over time. NOTE: It was 3.74% when this article was written in the third week of September.
Interest rates are different according to numerous variables. Interest rates can be different based on loan size, credit score, property type, loan type, how many days you need to lock-in the interest rate for, and more.
I am not going to talk about exact mortgage rates which are impossible to quote online, due to the variability of each of our own individual circumstances. But I can tell you the recent direction of the 10 Year Treasury Bond. The bond market is way more important than anything the Federal Reserve does. The bond market is fast and current, and a leader. The Federal Reserve is slow and old, and a follower.
Mortgage rates have dropped in the last few months. This happened before the Federal Reserve took any action. This is a perfect illustration of how the Federal Reserve is usually following the market, not leading it.
Bond market report
The 10 Year Treasury Bond is not an exact correlation to mortgage rates. But watching the 10 Year Treasury Bond does give you an idea of the direction of mortgage rates. It is good to know this historical information.
The 10 Year Treasury Bond is around 3.74% today.
One month ago the 10 Year Treasury Bond was 4.2% on June 25th 2024.
It was around 4.4% in May 2024.
In February 2024 the 10 Year Treasury Bond was 4.2%.
July 2023 the 10 Year Treasury Bond was 4.0%.
Recent data
As you can see interest rates really have not done much of anything for almost the last one year, up until very recently. Below are more interesting historical numbers.
In 2021 it averaged around 1.5%.
In 2020 it was under 1%.
Historical data
With the 10 Year Treasury Bond where it is now, rates are around a historical average. They are not high by any means. Not according to history when you keep going back more than just a few years.*
2018: the average yield of the 10 Year Treasury Bond was 2.91%.
2017: the average yield of the 10 Year Treasury Bond was 2.33%.
2007: the average yield of the 10 Year Treasury Bond was 4.63%.
1997: the average yield of the 10 Year Treasury Bond was 6.35%.
1987: the average yield of the 10 Year Treasury Bond was 7.18%.
1977: the average yield of the 10 Year Treasury Bond was 7.42%.
*The source for these numbers comes from: https://www.macrotrends.net/2016/10-year-treasury-bond-rate-yield-chart
You can take an even deeper dive into the long term history of interest rates by looking at this blog and its data and video.
Conclusion
Do you still have questions about mortgage rates? Contact me to discuss your questions. Click here to schedule a call, or you can email me directly. You can also get a more exact rate quote according to your specific scenario by clicking here.
Brian Martucci is a loan officer for Capital Bank Home Loans, a division of Capital Bank, N.A. He has been in the mortgage industry since 1986 and has served in a number of roles, including loan processor, loan officer, mortgage broker, branch manager, and vice president. Brian Martucci – NMLS# 185421. His opinions do not necessarily reflect the opinions and beliefs of Capital Bank Home Loans or Capital Bank. Capital Bank, N.A.- NMLS# 401599. Click here for the Capital Bank, N.A. “Privacy Policy”.
