Are 10-year Treasury Yields A Shot Across The Bow Of The Real Estate Market?

By | January 10, 2018

Over the past month or so Hallmark Abstract Service has explored whether blockchain may at some point in the future disrupt the title insurance industry (‘Can Blockchain Technology Ultimately Eradicate Any Need For Title Insurance In New York State?‘) !

In addition, potentially affecting real estate and real estate transactions are the issues surrounding the loss of the SALT deduction through the new tax bill. This new law may be an impediment, if not to transaction volume, then likely in terms of price action. And, unfortunately for current homeowners but as a potential benefit to potential homebuyers particularly in lower New York State, that price action is likely to be down.

Mortgage Rates May Be A More Immediate Problem

But, for those potential homebuyers who will be financing their purchase with a mortgage, the move-up in the yield of the 10-year treasury note may put a crimp in those plans or at least make the effort more expensive!

Interestingly enough, the two graphs below showing the current 6-month move in the 10-year treasury note and 30-year mortgage rates indicate that mortgage rates have stayed relatively stable while the treasury yield has broken-out to new near-term highs.

Where do they go from here?

10-year treasury note chart

Source: MarketWatch

30-year mortgage rate chart

Source: YCharts

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