According to Lou Barnes, a local mortgage broker who is frequently quoted in the national press, when the 10 year treasury yield hits about 3.33%, we’ll be back to 5% 30 year mortgages.
Right now, the 10 year treasury is around 2.775%, up about 1.1% in just a few months. However, it has stabilized.
The big question those in the investing world are asking is whether the yield will continue up, or go back down.
If you watch my video, you’ll see that I believe the yield will go back down.
But, as Lou points out, the correlation between the 10 year yield and 30 year mortgages is very clear.
While I’ve mentioned in the previous blog that the economy is not quite as bad as everyone is led to believe (still not rosy though), one area that has been particular hurt is residential housing.
If you’ve been following my blogs you know I’ve been saying this for quite some time.
Here’s a good article where Warren Buffett says exactly that.
