Mortgage-bond yields that guide home loans soar to 4-month high
Yields on Fannie Mae and Freddie Mac mortgage securities that guide home-loan rates reached their highest levels in four months, suggesting borrowing costs may rise from record lows. Fannie Mae’s current-coupon 30-year fixed-rate mortgage bonds climbed to 3.71 percent as of 9:30 a.m. in New York, tracking 10-year Treasuries today as those yields rose from 3.64 percent to the highest since July 13, according to data compiled by Bloomberg. Yields on the mortgage securities, which typically increase loan rates by similar amounts, have risen from 3.27 percent on Nov. 4. Benchmark Treasury yields have jumped as the Federal Reserve embarks on buying an additional $600 billion of U.S. government debt in a bid to spur economic growth. Higher Treasury rates probably aren’t being caused by concern the Fed’s plan will weaken the dollar or boost inflation, analysts at Barclays Capital led by Ajay Rajadhyaksha in New York wrote.