BOND MARKET SELL OFF 2021 - MARKET CRASH

Mortgage Rates On The Rise Due To Increase Yields On Treasury

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This Breaking News Article Is About Mortgage Rates On The Rise Due To Increase Yields On Treasury

Many homeowners and homebuyers are concerned about the sudden spike in mortgage rates last week. The sudden increase in the U.S. Treasury has spiked mortgage rates across the board on all different types of loan programs. This alarmed many borrowers on what it could cost them when it comes to locking rates. Many homeowners who did not lock their rates have seen rates skyrocket they need to wait for rates to come down in order to lock their rates. Raw mortgage rates at lenders have increased more than 0.375% to 050% in the past week with no signs of a correction. Many borrowers have started to panic already while others are listening to loan officers who expect a market correction.

Mortgage Rates On The Rise With Movement In The Bond Market

The volatile movement in the bond market has many industry leaders and analysts forecasting higher mortgage rates in the coming short term. Mortgage rates have skyrocketed in the past week for the first time in 12-months. The U.S. 10-year Treasury bonds hit 1% for the first time since March 2020. Policies of the new Biden/Harris administration and the Democrat-controlled Congress will no doubt skyrocket inflation which more likely means increasing interest rates. The news of Democrats in control of both Houses of Congress spurred more concerns of stimulus spending to firepower the struggling economy. Biden and both Houses of Congress spiking stimulus spending and bailing out Democrat-controlled states from their financial irresponsibilities and mismanagement spiked bond yields to hit 1.08% from last week’s 0.93%. Investors are expecting increasing coronavirus disaster aid. As the economy gets the federal stimulus aid injected into the economy, economists expect higher bond rates which could skyrocket mortgage rates.

Many experts who have forecasted a strong housing market to continue for the next three years due to historic low rates have changed their tunes. If Democrats keep printing money and keep on spending money out of control, bond yields will continue to climb which means mortgage rates will skyrocket. This will cause high inflation, high rates, and affect the housing market. A market crash is the talk of the business community.

What Does This Mean To Mortgage Borrowers And Lenders

With historic low mortgage rates, mortgage companies have been thriving for the past 18 months. Many lenders beefed up on their personnel due to the strong forecast in the housing market. However, fears of inflation are looming. Investors are showing deep concern and hoping for the best. However, the bond yields have been spiking like never before. It hit the highest rate since March of 2020. Bond yields have skyrocketed in the past two days. Many homebuyers and homeowners have started the mortgage process but did not lock their rates. The next few days will be very important in forecasting mortgage rates for the days and weeks to come. We will be paying close attention to the direction of bond yields and monitoring rates.

What Analysts And Economists Are Forecasting And Saying

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Gina Pogol of Gustan Cho Associates is a market expert and freelance financial and mortgage journalist. Gina Pogol has been following economic impacts on mortgage rates for almost two decades. In most cases, Gina is spot on.
Gina Pogol as well as a number of other well-known mortgage analysts and experts are forecasting 30-year fixed-rate mortgage rates can hit north of 3.5% by the end of 2021.

Correction On The 2021 Housing Market Forecast Prediction

It is not just Gina Pogol but dozens of mortgage and financial experts who had a change of faith in the housing market forecast. This is a 180-degree turn from what experts were forecasting just a few weeks ago of rates being low for the next 18 months. With the trillions of dollars, the Biden Administration has in line to stimulate the economy, the stronger the economic firepower, the higher the bond yields, and the higher the rates. On the flipside, if there is a stock market crash and/or other economic bad news, bond yields can plummet which means mortgage rates can go down. However, the Democrats are dead set in artificially stimulating the economy with trillions in aid. Consumer confidence in the coronavirus economic recovery and growth is supposed to escalate to all-time highs since the pandemic broke due to the mass push on vaccines and more stimulus aid by the Biden Administration. As the Biden Administration is artificially injecting trillions of dollars in the economy including mismanaged blue states like Illinois, New York, California, inflation is expected to become a problem, and rates are forecasted to go higher. As inflation sets in and rates keep on increasing, housing prices will continue to climb but demand will decrease due to higher mortgage rates. Many homebuyers could potentially be kept out of the housing market. As recent reports state, home building materials have doubled in the last 12 months. Prices are increasing on just about everything which is very noticeable and a sure sign of inflation. This is a breaking story on Gustan Cho Associates. We will keep our viewers on new developments and updates in the coming days and weeks.

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