Mortgage rates and 10 year US Treasury Bills
I've always used the 10 year US Treasury Bill as a proxy for mortgage rates and I've noted before that it isn't perfect but does provide a trend. I noted previously that there has been somewhat of a disconnect in the relationship recently and I wish I could find the post but I'm sorry to say I can't find it. At any rate (pardon the pun), with a hat tip to Noah Rosenblatt at Urban Digs and Dan Green at The Mortgage Reports, Dan is saying that the 10 year is not the proxy for mortgage rates, rather they "are 'made' from the price of mortgage bonds using a mathematical bond formula."
Complex, perhaps but maybe a couple of charts courtesy of Bankrate and Big Charts will illustrate that while rates for each have declined, the mortgage rates have been more volatile and neither has gone up or down in lock step with each other.
As I mentioned yesterday, mortgage rates have declined recently and are currently under 6% for a 30 year fixed rate loan. Most forecasts are for lower Fed Funds rates, lower 10 year Treasury Bills and slightly lower mortgage rates.