Why Residential Mortgage Rates Won’t Rise Over The Next Two Years (Ultra Bond Futures Trading At An Ultra Premium)

Mortgage lenders should rejoice at the continuing low level of 30-year mortgage rates and the 10-year Treasury yield.

The Covid-crisis can be seen in the following chart, starting in January 2020. It has been all downhill since January 1st in terms of rates and yields. With the exception of the blip in the Freddie Mac US Mortgage Market Survey 30 Year Homeowner Commitment rate around March 19, 30-year mortgage rates are barely above 3%.

The US Ultra Bonds futures price continues to trade at an ultra-premium.

The ultra premiums in ultra bond futures indicates that the Covid shutdowns are likely to return. Or continue to ravage the economy. And endless interference in markets by The Federal Reserve.

Mortgage Purchase Applications Rise 9% YoY Even With COVID-19!

According to the Mortgage Bankers Association, the Refinance Index decreased 0.2 percent from the previous week and was 176 percent higher than the same week one year agoThe seasonally adjusted Purchase Index increased 9 percent from one week earlier. The unadjusted Purchase Index increased 7 percent compared with the previous week and was 9 percent higher than the same week one year ago.

Mortgage refinancing applications declined slightly by -.23% despite near historic low mortgage rates.

Take that, COVID-19!