Key Takeaways:
– The US 10-year Treasury yield has stepped up following the victory of President-elect Donald Trump.
– Closely trailing this, mortgage rates are also on the rise.
– The 30-year fixed mortgage rate registered a jump of 9 basis points, taking it to 7.13%, the highest since July 1, this year.
Rising Treasury Yields and Mortgage Rates
With the ushering in of the President-elect Donald Trump era, financial metrics have taken an interesting turn. Notably, the U.S. 10-year Treasury yield and mortgage rates have seen an upswing.
To give you some perspective, the 10-year Treasury yield is one of the key indicators of the health of the US economy. A rise in this yield could point to varied economic outcomes like a strengthening economy or increased inflation expectations.
On this prevailing wave, mortgage rates are also climbing up. They typically shadow the benchmark yield trend. We saw this happen Wednesday when the 30-year fixed mortgage rate surged to 7.13%. That’s a considerable jump of 9 basis points.
Since the beginning of July this year, we have not seen such high rates. But the markets remained unpredictable. The rise came relatively unexpectedly. Bond traders and mortgage professionals had anticipated movement in rates following the election, but not necessarily such a sharp incline.
Why the Rise Matters
The spike in mortgage rates has significant repercussions on common folks planning to buy a home. It could mean shelling out more money towards interest in a home loan. In essence, your dream home just got a bit more expensive.
How We See It
While it may seem daunting, it’s crucial to remember these rates are still on the historical low side. However, people shopping for homes or thinking of refinancing should definitely take note of these developments. Long-term interest rates could continue to take an unpredictable path with the incoming administration.
Looking Ahead
In the coming months, the markets will be closely watching the policies and economic direction set by President-elect Trump. These can have a profound impact on these rates. There will also be added uncertainty due to potential policy shifts once the President-elect gets to the White House.
So, if you’re someone looking to take a mortgage or even an investor for that matter, it’s crucial to keep a finger on the pulse of these changes. This way, you can react timely and make informed decisions.
In conclusion, the Trump era has signalled a rise in the U.S 10-year Treasury yield and in turn, mortgage rates. Everyone, from aspiring homeowners to big-time investors, needs to stay updated with these developments. The influence of politics on the economy is a reality we can’t ignore. So, let’s keep our financial vigilance high, even as we continue to embrace unpredictability as the new normal.