Another Wave?

Falling Treasury yield may prompt new refi activity
By MortgageDaily.com Staff
6/12/2002

The 10-year Treasury yield has fallen below five percent -- and mortgage rates are heading lower as a result -- according to an article today in the Wall Street Journal (WSJ). An economy that is weaker than initially believed is prompting forecasts that mortgage rates will stay low -- and possibly even fall further.

Last week, mortgage giant Freddie Mac reported the average 30-year fixed rate mortgage at 6.71%, the ninth week in a row it has remained under seven percent and the third consecutive weekly decline. Last November, the average 30-year had fallen as low as 6.45%.

According to today's application survey by the Mortgage Bankers Association of America, refinance applications are currently down nearly seventy percent from their November highs.

LionInc.com reports that the 10-year Treasury Note price is up 2/32 during late morning trading today, with the yield down to 4.96%. Treasury prices move in the opposite direction of Treasury yields.

WSJ went on to say that many investors "fear that terrorism warnings and weak corporate profits will keep a lid on the stock market."

One mortgage lender reportedly said, "if we crack 6.25% or 6.5%, America's phones are going to be ringing off the hook," according to WSJ.

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