Mortgage rates change with the economy. As mortgage rates alter, you may have to adjust your budget as well. If interest rates go up, it will definitely impact what you can afford when you apply for a mortgage. If you already have an adjustable-rate mortgage, you can expect your interest rates to spike. This, in turn, will increase the amount you pay each month without helping you pay the principal down any faster. You will still be making the same number of payments, just with more interest each month. Here’s an exhaustive overview of where mortgage rates are headed this year.
The Treasury Forecast
Since the COVID pandemic, financial economists have predicted that the treasury yield will continue to increase. Economists use the connection between a 30-year mortgage rate and a ten-year treasury yield to show distinct data patterns compared with numbers over the last 50 years. Any changes in mortgage rates change what buyers can afford. Even though the numbers show why the rise in interest rates is possible, it isn’t an exact science. Neither the treasury yield nor the 30-year mortgage rate is absolute, and this is why it is so hard to determine when rates will rise and by how much.
How to Figure Out Where Mortgage Rates Are Going
You can look at the 10-year treasury yield and its 50-year history and follow the patterns if you want to make a good guestimate. Even if you learn all you can about the treasury yield and how it impacts mortgage rates, it won’t give you a definite path to follow when it comes to determining interest rates. What you can determine is that when the treasury yield rises, so will the mortgage rates. It’s harder to determine the exact percentages. However, the best way to monitor the changes is to compare the averages.
Just the Facts
If you want to determine where mortgage rates are going, you need to look at many different factors, including the economy. The 10-year treasury yield and its long-standing history both play key roles in determining whether or not your mortgage rates will rise. Understanding all of these different factors is the best way to monitor the path of these rates. When you are getting ready to purchase a home, having this information at your disposal will help you get the best possible mortgage rates for your loan. Working with the agents at Brighton Escrow is the best way to get the most accurate information possible when you are trying to get a mortgage you can afford.
When you are ready to buy a home and need to find out what your future mortgage rates may look like, call our experienced experts at Brighton Escrow, Inc. We can help you understand how the 10-year treasury yield will affect your ability to get an affordable mortgage rate. Call and schedule a consultation today so that when the time is right to buy your home, you will be ready!