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The rise and fall seen in bond yields since April reflects the rise and fall in economic hopes as they relate to covid numbers. When everyone was staying at home and numbers were dropping, stocks were excited and bond yields were rising. As quarantines were lifted and more people became sick (or hospitalized, or dead, or however you want to count it), both sides of the market reconsidered their stance.

Mortgage rates, however, are setting record after record, and that’s translating to a sharp rise in mortgage activity.

For those accustomed to the very logical and normal practice of using 10yr Treasury yield movement as a rough proxy for mortgage rate movement, this is RIDICULOUS! What gives?

In a nutshell, mortgage rates are still falling because they weren’t able to keep up with Treasuries when rates initially plummeted earlier this year. They’ve slowly and steadily been making up for lost time