Interest Rates May Be Nearing Top

Analysts: Real Estate Rates May Be Nearing Top(November 14, 2005) -- With 30-year mortgage rates remaining just below 6.5 percent last week, some analysts say trading patterns in the Treasury bond market point to a crest in long-term rates. After Thursday's auction of $13 billion of new 10-year Treasury notes, the 10-year notes rose to 4.55 percent--the lowest in two weeks. Columnist and mortgage broker Lou Barnes believes that since the spread between the two-year T-note and the 10-year diminished to .14 percent from wider than .2 percent in recent months, "long-term [mortgage] rates may be near a top," regardless of future Federal Reserve actions. Barnes explains that the threat the spread could narrow further, possibly creating a state of "inversion," means that the Fed's movements will aim to curtail the risk of recession and, thus, create the likelihood for lower rates of all kinds later next year. Source: Inman News Features (11/14/05); Barnes, Lou