La Jolla Real Estate, Del Mar real estate, Rancho Santa Fe Homes, Carmel Valley Real Estate, University City and
Downtown San Diego real estate, homes and condos for sale in California - Ruth Mills & the Mills Team, REALTOR.






Search the San Diego MLS
(includes all areas in San Diego County)



 May 31, 2009

Interest Rates Increase as Investors Tap Yields of Short-Term Gains
This week, mortgage rates hit a 6-month high point. This increase has occurred largely due to what is known as the yield curve, a gap between the yields on a 2 year Treasury note and a 10 year note. This week the gap widened to its highest ever at two point seven-five percentage points.
The United States Treasury has been purchasing mortgage-backed securities in order to keep mortgage rates at bay. The problem is that as mortgage rates have increased, short-term yields did as well. This has resulted in higher rates on short-term bonds which in turn, make mortgage backed securities not as attractive to investors.

This has driven the average rate on a 30 year mortgage to five point two nine percent; an increase from 5.03%.

It is believed by treasury strategists that the government will continue to intervene in order to keep rates lower.