Mortgage Rates Hit the 3% Wall. So Now What?
In this unusual downturn, don’t count on the housing market to conform to past trends.
Demand is high for housing and refinancing.
Photographer: David Paul Morris/Bloomberg
Two months ago, I wrote a column with the headline “Don’t Expect Mortgage Rates to Drop Much More.” At the time, the average for a 30-year fixed loan was near its record low of 3.23% but still much higher than what might be expected, given the going yield of 0.7% on benchmark 10-year U.S. Treasuries.
Even as mortgage rates continued to slide in the following weeks, to 3.15%, then 3.13%, I was confident that my thesis would hold up and the spread between the two rates would remain historically wide. After all, the 10-year Treasury yield had dropped by eight basis points during that time as well.