Understanding Today's Mortgage Rates

10-Year Treasury Yield.

Understanding Today's Mortgage Rates.

Predicting mortgage rates is not an easy task, but there is a reliable indicator that can shed light on the future: the relationship between the 30-Year Mortgage Rate and the 10-Year Treasury Return.

Over the last 50 years, the average difference between these rates has been 1.72 percent. Simply put, when Treasury Yields rise, mortgage rates tend to do the same. Conversely, when yields drop, mortgage rates typically drop as well.

But recently, the difference between these rates goes beyond the historical norm. Why is this happening? The answer lies in the uncertainty plaguing financial markets right now. Factors such as inflation, other economic drivers, and decisions by the Federal Reserve (Fed) all contribute to the volatility and expansion of mortgage rates.

Why all this matters to you as a home buyer: Based on the historical average between the 30-Year Mortgage Rate and the 10-Year Treasury Yield, mortgage rates have the potential to improve in today's market.

30-Year Mortgage Rate and 10-Year Treasury Yield

Housing Market Sees Near Record Highs

According to a report by Redfin, US house prices remained strong in June despite high mortgage rates and limited stocks. With fewer homes for sale and increased demand from buyers, the median selling price reached $426,056, just 1.5% below the all-time high set in May 2022.

Compared to the previous year, the median selling price for June was only 0.6%, the smallest decline in the last five months. In addition, houses started to be sold above the list price for the first time in nearly a year.

Although experts predict a gradual decline in mortgage rates due to low inflation, it is unlikely that this will be significant enough to attract more sellers to the market in the near future. As a result, the housing supply will remain low. However, when rates eventually drop significantly, we can expect prices to rise as more buyers enter the market.

Lionel Messi House Hunt in Delray Beach and Boca Raton

Famous football player Lionel Messi is currently looking for a new home in South Florida. According to the Palm Beach Post, Delray Beach and Boca Raton are two areas she has her eye on.

Recently transferred to MLS's Inter Miami CF, Messi is looking forward to finding the perfect place for himself and his family. Although he owns three apartments in Sunny Isles Beach, including a unit in the Porsche Design Tower, Messi doesn't seem to reside there at the moment. While looking for a new home, he initially considered Fort Lauderdale, but eventually changed his mind due to concerns about access to the beach.