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US bond yields fell at the start of the trading week. Here’s a look at the changes over the past week:
- The yield on the two-year note fell by -13.4 basis points to 3.920%.
- The yield on the 5-year note fell 10.9 basis points to 3.650%.
- The yield on the 10-year note fell 8.3 basis points to 3.801%.
- The yield on the 30-year US Treasury note fell by about 4 basis points to 4.092%.
Returns for the start of the trading week are as follows:
- 2-year yield 3.889%, -3.1bp
- 5-year yield 3.628%, -2.2 bps
- 10-year yield 3.788%, -1.3 bps
- 30-year bond yield 4.086%, -0.6bp
The spread between 2-10-year bond yields has fallen to -10.1 basis points. Remember, the spread briefly hit positive territory on August 5, but was back to -20 basis points early last week.
The spread between the yield on 2-30-year bonds reached +19.7 basis points after falling to +5.1 basis points last week.
Low yields in the US tend to be negative for the US dollar (as long as foreign interest rates do not fall sharply).
Lower yields are good for the U.S. housing market, especially for first-time homebuyers who have been put off by rising interest rates. U.S. mortgage rates tend to be tied to the 10-year yield, although the spread can vary.
The average interest rate on a 30-year fixed-rate mortgage fell to 6.46%, its lowest level in 15 months, offering some relief to homebuyers in a tough housing market. That’s down slightly from 6.49% last week and well below the 7.23% rate seen a year ago. The current rate is the lowest since mid-May of last year, when it was 6.39%.
Additionally, rates on the 15-year fixed mortgage also fell, with the average falling to 5.62% from 5.66% last week. The drop is encouraging for homeowners looking to refinance at a lower rate, as the average rate was 6.55% a year ago. The high-end mortgage rate was 7.8% on Oct. 25, 2023.
