vrijdag 22 maart 2013

Correlation: 30 Yr. Treasury Yield Vs. 30 Yr. Mortgage Rates

Just wanted to add another couple of correlations to my collection. We will learn about fixed and adjustable rate mortgages. These are correlated against treasury yields and fed funds rate respectively.

1) Conventional (Fixed) Mortgage Rate Vs. Treasury Yields
As you can see mortgage rates are always higher than treasury yields because U.S. treasuries are considered much safer than mortgages.
Chart 1: 30 Yr. Treasury Yield Vs. 30 Yr. Mortgage Rate
2) Adjustable Mortgage Rate Vs. Fed Funds Rate
Adjustable Rate Mortgages on the other hand are linked to the Fed Funds Rate.
Chart 2: 1 Yr. Adjustable Rate Mortgage Vs. Fed Funds Rate

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