By midday Tuesday, the 10-year had leveled off for the day after a surge early in the day. The 10-year Treasury hovered around 4.06%, still well below the year-to-date high of 4.31%. However, the volatility paused the excitement around mortgage rates in the 5s for the time being.
It’s been an eventful two months with the Treasury market, and one market analyst said that while some increases in rates could be good for some lenders, it’s not good for brokers who are looking for a stronger spring buying season.
Eric Hagen (pictured top) is the managing director and mortgage and specialty finance analyst at BTIG. He discussed how the first two months of the year have left the market spinning, starting with President Donald Trump ordering Fannie Mae and Freddie Mac to buy government bonds, forcing rates lower.
“The MBS announcement from Trump at the beginning of January was totally unprecedented,” Hagen told Mortgage Professional America. “And so all these things have come to a head. I mean, it was nice to see mortgage rates below 6%. We feel like they can hang around that level. But rates went back up Monday.”
Pressure on Treasuries
Hagen said that an increase in rates can improve the quality of loans for lenders. However, for a stagnant housing market, a more substantial rate decline is needed to spur activity.
Publisher: Source link
