Interest rates are starting to move up steadily, even though the Federal Reserve has been trying very hard to keep that from happening.
When Federal Reserve Chairman Ben Bernanke suggested that the Fed may start to “taper” the rate of quantitative easing eventually, the bond market had a conniption and the yield on 10 year U.S. Treasuries shot up dramatically.
In an attempt to calm the market, the Fed stopped all talk of a “taper” and that helped settle things down for a brief period of time. But now the yield on 10 year U.S. Treasuries is starting to rise aggressively again.
This is important for the housing market, because mortgage rates tend to follow the yield on 10 year U.S. Treasuries. And if mortgage rates keep rising like this, another great real estate crash is inevitable.
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