Fresh new low on Mortgage rates

This week we saw mortgage rates reach new lows. Great news for Home buyers and homeowners.

Treasury Rally

Treasuries last month had their highest returns since August, returning 1.8 percent, reflecting the declining stability of the 17-member euro currency amid a worsening sovereign debt crisis, according to indexes compiled by Bank of America Merrill Lynch. The MSCI All-Country World Index (MXWD) of shares lost 8.9 percent including dividends, the biggest monthly decline since September. The euro declined 6.6 percent versus the dollar in May, also the most since September.

Thirty-year Treasury bond yields declined 12 basis points to 2.52 percent today and fell to 2.5089 percent earlier, the lowest in Federal Reserve records beginning in 1953. Five-year and seven-year note yields also slid to record lows today.

Valuation measures show Treasuries are at the most expensive levels ever. The term premium, a model created by economists at the Fed, reached negative 0.98 percent, the most expensive level ever. A negative reading indicates investors are willing to accept yields below what’s considered fair value.

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