Yeah today was a serious jump. Moves on the bond market are REALLY important, especially for long term mortgage rates as well as Wall Street. I am a moron with how they affect Wall Street but with respect to real estate, it is easy to see.
A standard barometer or shall I say approximator (if there is such a term) is to take the 10 year yield and add about 1.25 to it to get an approximate value for a conforming 30 year fixed rate mortgage. What is important to note is that all basic fixed rate mortgages, and even the fixed portion of ARMs and other hybrids, are really based on this (and/or) the 30 year yield index. So as correctly pointed out earlier in the thread, this yield has been rising since about mid March, (I believe) as I am to lazy to look at a chart for the moment.
I believe that this can be the most probable catalyst to accelerate a more substantial decline in real estate pricing on top of all the other factors pushing the market down. It hits and hurts every sector in real estate, those in distress wishing to refinance, those new buyers have purchasing power reduced, it cuts across the entire strata. So yes if this bond market selloff continues, it is my belief that we will see a corresponding chunk down in sales and pricing rather then the slow and steady run down which I have been assuming. Right now it crossed 5, so how high it goes will determine the carnage.
