Rising 10-Year T-Bill Yields Begin to Affect Mortgage Borrowing Costs

IT was bound to happen. Overplaying the COVID card has caused mountains of reckless government borrowing. With each passing day, the resulting debt-aftermath is approaching, and it looks daunting. It is clear to prevent a complete collapse of the credit currency that interest rates will need to go up to begin to remove from circulation all those inflation-causing credit instruments responsible for skyrocketing real estate and stock market valuations. In doing so, the Reserve Bank protects itself from collapse while transferring any resulting consequences to the people.

Honestly, it is not difficult to see that natural law is the gold standard of civilization. It fosters pricing stability and rationality, but it seems absent in today's artificial and highly speculative economic world, where a few people decide international economic policies and with it the fate of the world's working class. It appears that banks have silently become the "so-called" New World Government with nations reduced to mere debtor entities.

Are 10-Year Treasury Yields Signaling a Housing Market Change?

Today's mighty economic engine fueled by trillions of dollars of borrowed stimulus are already beginning to signal the vibrations of a trend reversal, much like the shuddering of a mighty cruise ship when it reverses its massive propellers. The 10-Year U.S Treasury Yield has nearly tripled from its low of .5% and now yields 1.5%. Mortgage interest rates are based on the 10-Year T-Bill and not on overnight Fed rates charged to banks. Keep your eyes on this T-Bill index.

Without a doubt, today's housing market needs balance. D/FW area homes are selling for ever-increasing prices driven by artificially low-interest rates, a hyper-deluge of government money printing, and a spike in buyer demand fueled in part by Americans escaping mostly Democrat-controlled cities and states. Oddly enough, rising home prices, in many instances, have caused those who would otherwise sell their homes, to stay put, exasperating the already low supply of homes for sale. Most homes that hit the market quickly get multiple offers that turn into a bidding war, signaling strong demand. However, on the horizon are rising mortgage and interest rates fueled by massive government borrowing that can slow or reverse home values creating a more balanced housing market. Only time will tell. 

My advice? Hang tight, plan carefully and execute your plan. Housing is not an option but rather an absolute need for all. With so many complexities at play, perhaps it is time to talk to Realtor® Mike Askins, a long-time local DFW real estate top-producing expert, about your specific housing needs and how best to accomplish your goals.

Most of my clients who do sell their homes already have a new home under construction. Buying a new home seems to be the safest way to prevent not having a home ready when your current home closes. My new home move-up will save you thousands of dollars compared to full-cost brokerages. Find out more.

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