We’re almost 60 days into the new presidential administration, and we’re starting to get a picture of their fiscal plan. A key target of their plan is the yield on the 10-year US Treasury bond, and if you own a home or are considering buying, you may really benefit from this!

Just a quick reminder: These articles I share here are researched and written by me! As part of my commitment to ongoing support for my clients and partners, I write these articles to help them understand what’s really happening in the markets, beyond the headlines and soundbites.

US Treasury Secretary Scott Bessent has made clear that a priority of this administration is to keep the yield on the 10-year US Treasury bond (“10-year”) low. There are three reasons for this:

– To boost economic growth by keeping borrowing cheap for individuals and businesses

– To reduce government debt costs, easing deficit pressures (the 10-year yield affects the rate at which the government borrows money)

– To signal to the markets that the government is fiscally stable (this in turn helps to stabilize the financial markets, reducing market volatility)

This could be a potential gift to the housing industry, which has been sluggish in recent years due to higher interest rates. Why? Because mortgage rates are directly influenced by the yield on the 10-year. As the 10-year yield increases, so too do mortgage rates. So as the government does what it can to keep the yield on the 10-year low, we should expect mortgage rates to follow.

(This relationship is something we’ve discussed in this newsletter before.)

This is important for two reasons:

1. This means a potential refinance opportunity for people who bought homes in the past 24-36 months, when rates were higher

2. Lower payments mean increased affordability, which is good news for buyers. However, in the past, we’ve seen lower rates increase the number of buyers, creating more competition in the market, which can drive up prices.

Of course, a low yield on the 10-year isn’t as simple as a government official waving a magic wand. There are plenty of things that could cause the 10-year yield to rise, throwing cold water on this plan:

– Trump’s tariffs will raise import costs, driving inflation.

– If Trump’s tax cuts are renewed but spending cuts fall short, we could see the 10-year yield rise.

– If GDP doesn’t slow as much (if the labor market remains stubbornly strong), 10-year yields could stay flat or rise

– Global instability could keep 10-year yields high, a dynamic far beyond on the control of Treasury Secretary Bessent.

As with all things, we’ll take a “wait-and-see” approach, but it’s important to understand the dynamics of the stated goal here, versus the potential challenges. The housing market would welcome lower mortgage rates, but as we’ve seen (and written about) over the past several years, there are several factors that impact mortgage rates, and possibly even more factors that influence those factors!

If you find this interesting or helpful, please feel free to share it with a friend, family member, or co-worker – it’s my goal to educate and empower as many people as possible during this incredibly unique time in housing!

Here is how I can help!

– If you are looking to purchase a new home or have questions about your mortgage, the market, getting preapproved, etc., or

– If you are a Realtor Broker, or Financial Services Professional looking for a lender with great financing solutions to help educate your clients on the state of the market to help them feel good about their decisions,

Please call today – I am happy to help however I can!

Brian Mutter is a twenty-year veteran of the mortgage and real estate industry. His vast experience across nearly all aspects of real estate makes him an incredibly well-rounded problem-solver. Brian’s clients are treated to a white-glove client experience every single time. Education, information, and communication are the cornerstones of his approach.

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📞 248.956.0445
📧 brian@goforwardmortgage.com
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