How the Bond Market Affects Mortgage Rates (And Why Timing Isn’t Everything)

Ever wonder why mortgage rates seem to move around so much? A big part of it has to do with the bond market. Simply put, mortgage rates tend to follow the ups and downs of the 10-year Treasury bond yield. When bond yields rise, mortgage rates usually do too. When they fall, rates often ease back down.

Sounds like the easy answer is: just wait until rates drop, right? Not always.

Here’s why: when interest rates are low, buyer demand goes way up. That means more competition, multiple offers, and less leverage when it comes to asking sellers for concessions. On the flip side, when rates are higher, the market often cools down, giving buyers more power to negotiate.

So, while it’s tempting to hold out for that perfect rate, the truth is—if you can achieve your goals now (even with a slightly higher interest rate), it may still be the right time to buy. You’ll likely face less competition and have more room to negotiate.

Moral of the story: if the numbers work for you and the house fits your goals, don’t let a higher rate hold you back. You can always refinance later if rates come down, but you can’t get back the opportunity you passed up.

Need help navigating the market? We can help! Your goals are our goals too.