A steep decline in the 10-year Treasury yield reflects investor anxiety about European markets. But the market movement signals refinance opportunity for loan originators.
In early trading today, the Dow Jones Industrial Average was down nearly 2 percent, though the decline has since subsided.
Domestic markets are following European markets, with the Stoxx Europe 600 plummeting more than 2 percent and the FTSE 100 off nearly 2 percent.
As investors moved their money out of stocks and into the safe haven of U.S. Treasury bonds, the yield on the 10-year Treasury tumbled.
In late morning trading, the yield on the 10-year Treasury was just above 2 percent but had fallen below 2 percent for the first time since May 2013.
Data from Freddie Mac indicates that total residential originations were $560 billion in the second-quarter 2013 — when rates were last this low. That was far better than the $320 billion in estimated originations for the quarter ended last month.
Mortgage activity had already begun rising on falling rates, with the e U.S. Mortgage Market Index from LoanSifter/Optimal Blue and Mortgage Daily for the week ended Oct. 10 climbing 8 percent from a week earlier.
The increase in the index, which reflects average per-user pricing inquiries by LoanSifter clients, was driven by refinances — which jumped 16 percent to the highest level since July 2013.
