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Now that Federal Reserve Chair Janet Yellen has completed her semi-annual report to Congress, let’s take a look at residential mortgage rates and the Treasury yield curve.
Here is the mortgage curve consisting of 30 year and 15 year fixed-rate mortgages and 3/1 and 5/1 ARMs. Also, several different Treasury and swap curves.
Notice how “kinky” the mortgage rate curve is. It is the partition between fixed-rate and variable rate mortgage rates.
But there is even a kink in the ARM rates.
Since December 16th when The Fed raised the Fed Funds Target rate by 25 basis points, the very short-end of the yield curve rose, but the remainder of the curve is lower (mostly due to China’s slowdown and its reverberation through the global economy. But the mortgage rate curve is noticeably lower.
Not that ARMs are used much since the financial crisis.
Here are several of the other Treasury and swap curves.
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