A slow week turned into a big-time market swing as the 10-year Treasury note yield spiked on the news that the United States and China have agreed to cancel some tariffs. The report Thursday morning led to a major bond selloff as investors dove back into equities. The Dow, S&P 500 and NASDAQ all hit record trading highs on Thursday.
The 10-year note jumped by 15 basis points. That’s its largest increase since President Trump was elected in 2016. That means mortgage rates also went up, but that was not reflected in the weekly summary from Freddie Mac. Going into Thursday, the 30-year fixed-rate mortgage average, according to Freddie, was sitting at 3.69%.
It’s very important to remember that your mortgage rate will likely not be the same as that average. While mortgage rates typically sit 1-2 percentage points higher than the 10-year note yield, your mortgage rate will fluctuate depending on the type of loan, down payment amount and your credit score among other factors. That’s why it’s best to speak to a Movement Mortgage loan officer so you can know exactly what your rate will be and why.
In other news, the latest home price forecast from CoreLogic shows that home prices rose at a rate of 3.5% year-over-year for September. The group predicts that September of 2020 will show a home price gain of 5.6% compared to 2019.
A lack of inventory in homes priced below $200,000 has stunted the homebuying process for many Millennials. A September report from Realtor.com showed that the number of homes for sale priced below $200,000 dropped by nearly 9% with mid-market homes showing no inventory growth. Rob Dietz, the chief economist for the National Association for Homebuilders, says “Right now only about 10% of newly-built home sales are priced under $200,000. Five years ago that share was 1 in 5, and 10 years ago that share was 40% of new home sales priced under $200,000.”