Our housing market has enjoyed the benefits of historically LOW, LOW rates for quite some time now. Â And, complacency can be the enemy of building wealth. Â This morning we've seen the largest swing in mortgage interest rates thus far ALL YEAR! Â Treasuries continue their negative slide this morning (and as US Treasury notes slide, mortgage rates tend to rise)!! Â So far (at 9am), rates are up .125%. Â It may not sound like much but it can affect both the amount you will pay in a mortgage and may also affect the buyer's ability to purchase!! Â This morning the 10 year treasury note hit 1.86% in very early trading. Â Since last Friday's employment report (stating that the unemployment rate had dipped again to 7.6%), the 10-year treasury note has increased 22 basis points (bp) in rate, that's a size-able move in a short time. Â 30-year mortgage rates have increased 10 bp in rate.
According to Investopedia, a basic point (bp)Â unit is equal to 1/100th of 1%, and is used to denote the change in a financial instrument. The basis point is commonly used for calculating changes in interest rates, equity indexes and the yield of a fixed-income security.Â The relationship between percentage changes and basis points can be summarized as follows: 1% change = 100 basis points, and 0.01% = 1 basis point. Â So, a bond whose yield increases from 5% to 5.5% is said to increase by 50 basis points; or interest rates that have risen 1% are said to have increased by 100 basis points.
Anyway, all financial jargon aside, the bottom line is if you are considering a purchase or sale of a primary residence, investment property or simply refinancing an existing mortgage loan, I'd get on it!!! Â As this can and will affect buyers AND sellers!!!