Mortgage Rates Set to Increase as Bond Yields Rise

By Kyle Chezum Updated on 11/15/2010

11/15/2010

Yields on mortgage-backed securities issued by Fannie Mae and Freddie Mac climbed to a four-month high this morning, raising the possibility that mortgage rates may increase as a result.  Current-coupon 30-year fixed-rate mortgage bonds increased alongside 10-year Treasury bond yields are currently sit higher than they’ve been since July 13^th.

The jump in Treasury yields is likely the result of the Fed’s announcement that it will purchase $600 billion of government debt.  Mortgage rates likely won’t show as much of an increase but are expected to rise if the trend continues.

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