I've mentioned on occasion, but it is worth repeating: To follow mortgage rates on a day-to-day basis, keep your eye on the mortgage-backed securities market. The popular 10-year U.S. treasury note is not the benchmark indicator for following rates.
Both are government-backed bonds, but they are as different as night and dawn.
Over the last 3 days of last week, we see from the chart that treasuries moved at breakneck speed while mortgage bonds barely moved.
On Wednesday, treasuries rallied huge, causing yields to plunge.
On Thursday, treasuries again rallied huge. And, again, yields plunged.
On Friday, treasuries plummeted. Big time. Yields soared in response.
But despite the feverish action in treasuries, mortgage markets barely budged.
This trading pattern counters the popular myth that 10-year treasuries predict future mortgage rates. They don't. Over the very long-term, maybe. But on a day-to-day basis -- no way Jose.
If you want to know where mortgage rates are going right now, you have be watching the mortgage-backed securities market.
And that brings us to the next issue -- MBS rate quotes aren't available to the general public. Therefore, if you're buying a home or looking to refinance, consider saddling up with a mortgage guy that pays for real-time access to mortgage market data.
So long as credit markets remain out of joint, expect mortgage rates to move independent from treasury yields.
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