So much for the meme that rising rates would crush the housing market.
(Bloomberg) The benchmark 10-year Treasury yield remains within its 34-basis-point trading range since the start of December after the Federal Reserve raised rates Wednesday, while leaving unchanged its projected path of hikes this year and next. The relative calm is a change for a market prone to shocks in the past few years, including an unusual bout of volatility in October 2014 and a plunge in yields last year in the wake of the U.K. vote to leave the European Union. After Donald Trump won the U.S. election, the 10-year yield swung 37 basis points in one session.
Freddie Mac’s 30 year mortgage committent rate has also remained in a tight range, although Freddie’s 30 year rate is in a tighter range of 24 basis points since December 1, 2016.
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The rise in the 10y Treasury yield and 30y mortgage rate has dampened mortgage refinancing applications.
Yet despite rates rising, mortgage purchase applications are actually 6% higher than the same week last year. So much for the rising rates crushing the housing market hysteria. At least, not yet.
“I thought rising rates would slow down the demand for mortgage financing!”
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