The yield on the benchmark 10-year Treasury fell to a new, yearly low of 2.82% Friday morning in the wake of another weak employment report.
In bond trading in the afternoon, the yield was fluctuating around the 2.84% level. Mortgages are priced off the 10-year, which means as the yield moves lower so too will residential loans rates.
As recently as yesterday, some mortgage bankers were offering 30-year fixed rate loans for under 4% depending on a borrower's FICO score, downpayment, and points paid. Mortgage lenders are hoping falling rates will trigger additional refinancing applications.
The yield on the 10-year fell after the Labor Department reported that private employers added a net total of only 71,000 jobs in July, far below the roughly 200,000 needed each month to reduce the unemployment rate. The jobless rate remained unchanged at 9.5%.
In early 2009 the yield on the 10-year fell to an all-time low of about 2.1% but then began rising steadily as the stock market recovered in the spring.
