Fannie and Freddy Loans

Fannie and Freddy Loans

Mtg rates going down even though the fed increased interest rates? Why the  heck is that?

The average rate of a 30-year fixed mortgage fell to 4.08% this week, the fourth consecutive week of declines, and the lowest level this year, Freddie Mac reported Thursday morning.

10 year treasury notes issued by the U.S. government are viewed as one of the safest investments in the world. They are widely traded, and lately investors have been gobbling them up. More demand sends the interest rate, or the yield, lower.

“We’ve seen a reversal of the ‘Trump Trade’ which began on election night that consisted of a broad rise in stock prices and bond yields moving up,” explained Mark Hamrick, senior economic analyst at Bankrate.

The 10-year Treasury note jumped after November 8 on Trump’s promises of tax reform and infrastructure spending. Higher yields make borrowing more expensive.

People thought that trump would change things quickly . That would result in people selling bonds and buying stocks. However, it does not look like that is happening quickly. Overseas uncertainty has also put pressure on yields. When people are nervous about the world situations, they tend to flock to U.S, treasury bonds- considered the safest in the world. When that happens, prices of bonds go up and yields go down.

So if you are thinking of buying, it’s a good time and if you are thinking about selling, its a good time. Best time to sell since 2006,