Yields on long-dated Treasuries have dropped sharply over the last week as prices have spiked.  As shown in the “Fixed Income” section of our Trend Analyzer tool below, Treasury ETFs like IEF and TLT have moved up into extreme overbought territory.

Mortgage rates have become much more attractive lately as well.  In 2018, it looked like the multi-year period of extremely low mortgage rates might be coming to an end as the 30-year fixed ticked up near 5%.  This spike in rates really did a number on homebuilder stocks as they traded down more than 40% from highs at one point last year.  The spike in mortgage rates only proved to be temporary, however.

As shown below, we’ve seen a dramatic drop in the 30-year fixed mortgage rate over the last several months.  As of yesterday, the interest rate stood at just 4.17%.

Below is a longer-term look at Bankrate.com’s national average 30-year fixed mortgage rate.  While we may not get back down to 3.32% again (you never know!), it’s important to remember that 4.17% is still an extremely low rate to pay on a home mortgage relative to history.

For in-depth analysis of the stock market and how it is impacted by interest rates and the economy, start a two-week free trial to our Bespoke Premium service.

Print Friendly, PDF & Email