Mortgage rates, already lingering at all-time lows, are poised to set new records based on Treasury market activity. The yield on the 10-year Treasury note is trading below its record low as the financial crisis in Europe escalates.
The Dow Jones Industrial Average was down more than 200 points in early trading following similar declines in Asia.
Behind the dismal market activity was a deepening of Spain’s banking crisis. Also impacting markets was Greece, with the German news publication Der Spiegel reporting that Germany and the International Monetary Fund could stop providing additional financing for Greece as doubt rises about the country’s ability to rein in its fiscal budget.
Market anxiety had investors flocking to the perceived safe haven of U.S. Treasury bonds — driving up prices and pushing down yields.
The 10-year Treasury note yield, which closed at 1.49 percent on Friday based on data from the Department of the Treasury, was floating at around 1.43 percent in early Trading Monday.
The 10-year yield fell to 1.47 percent on June 1 — its lowest level on record based on Federal Reserve data back to 1962.
The 30-year fixed-rate mortgage averaged 3.53 percent in Freddie Mac’s Primary Mortgage Market Survey for the week ended July 19 — its lowest level recorded since Freddie started the survey in April 1971. The 10-year Treasury yield averaged 1.52 percent during the period when Freddie conducted the latest survey.
Based on today’s 1.43 percent 10-year yield, mortgage rates could fall another 9 or so BPS in Freddie’s survey this week.
