Live Rate Quotes
Real Estate Chart of the Day
Mortgage rates and markets change constantly. Stay 100% current by taking The Mortgage Reports by email each day. Click here to get free email alerts, or subscribe to the RSS feed in your browser.
Foreign nations buy U.S.-dollar denominated securities because of their relative stability.
Mortgage-backed securities are among those securities.
And, for the unindoctrinated, it bears repeating that mortgage-backed bonds are what determine the day's rate for every mortgage product from the 6-month adjustable-rate mortgage all the way out the yield curve to the 50-year fixed mortgage.
Like all bonds, the more demand that there is for the security, the higher the price will be and, therefore, the lower its yield, or rate.
Over the past week or so, there have been whispers that China will be diversifying its portfolio of foreign holdings. This is a big deal because a major part of China's holdings are our country's mortgage-backed securities.
If the circulating stories are true, then China will be replacing its MBS holdings with gold and with other foreign currencies. That will introduce a steady new supply of bonds, cause MBS prices to drop and mortgage rates to move higher.
Dan Green (NMLS #227607) is an active loan officer with Waterstone Mortgage. Email Dan ator call 513-443-2020.
Bonus: Click to get a free, no-obligation rate quote. I love to work with my readers!
Since you have reached the end of this post, you may be interested in checking out the related posts below.
