The answer: YES and NO
Yes, US Treasury Notes have been an influence in recent years because they more accurately reflect demographic shifts in home ownership and are a very comparable relatively safe investment choice backed by the US Government than a little riskier than the secondary mortgage loan market like Freddie Mac and Fannie Mae. But first a little history and then some current events....
Answer = YES: Over the past 20 or so years, yields on the 10 year US Treasury notes have moved in direction comparable to the fixed rate conventional mortgage rates. Based on this article from The Balance: How Treasury Notes Affect Mortgage Rates. U.S. Treasury bills, bonds, and notes directly affect the interest rates on fixed-rate mortgages. How? When Treasury yields rise, so do interest rates. That's because investors who want a steady and safe return compare interest rates of all fixed-income products. They compared yields on short-term Treasurys to certificates of deposit and money market funds. They compare yields on long-term Treasurys to home loans and corporate bonds. All bond yields are affected by Treasury yields since they compete for the same type of investor.
Answer = NO: Based on Mortgage Daily News articles: Yes, Mortgage Rates are Lower and 10yr Yields are Higher Today & No, Mortgage Rates Aren't Based on 10yr Treasury Yields...True, US Treasuries set the tone for almost any interest rate in the US. - it's their yield that runs point for most other comparative investments.
Over the past 20 years, fewer people remained in their homes over a 20-30 year period. In fact, more households were moving on average every 7 years. Now, due to housing crisis fears of mid 2000's and other factors, that demographic as changed a little to people wanting to stay in their homes for at least 10 years. Therefore, it is common belief that the 10 Year Treasury yield more accurately predicts the movement of fixed rate 15 and 30 year mortgage loan rates.
So for now, I lean to the side of common thought that YES, 10 year treasury note yields DO predict or influence mortgage interest rates and the current marketplace factors is an anomaly.
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