Freddie Mac reported that interest rates have reached their lowest levels in 2011 this week for both 30 and 15 year fixed mortgages. The average rate for a 30 year fixed-mortgage dropped to 4.55% and 3.74% for a 15 year.
USA Today reported the fall in interest rates mirrored a drop in “the yield on the bellwether 10-year Treasury note [which] fell below 3% Wednesday for the first time since December, reflecting weakness in the U.S. economy.”
A bellwether note is defined as “a security that tends to lead the market and signal the general direction of future price movements” by yourdictionary.com.
Many factors in today’s market reflect a slow economy which would make inflation less likely, in turn producing an environment where lower yielding bonds are accepted.