The yield on the benchmark 10-year note briefly plunged by more than 22 basis points to an all-time bottom of 0.695 percent on Friday morning. The 30-year tumbled more than 28 basis points to its own record of 1.28 percent. Both have since bounced back slightly and were hovering at 0.772 percent and 1.361 percent, respectively.
The bond market is telling us “there’s a recession on the way,” Linda Duessel, senior equity strategist at Federated Hermes, a Pittsburgh-based asset manager with $575.9 billion under management, told FOX Business’ Maria Bartiromo on Friday.
The fast-spreading COVID-19 has infected 95,333 people worldwide and killed 3,282, igniting fears of an economic slowdown that have prompted investors to dump risky assets like stocks in favor of safer ones like U.S. Treasurys.
The spike in bond demand has driven down yields, the premium that investors demand to make purchases, which hurts savers but benefits homeowners looking to refinance.
“You will see mortgages with a 2 in front of them,” MBS Highway CEO Barry Habib said, referring to applicable interest rates. That compares with an average of 3.5 percent for 30-year fixed-rate mortgages on Friday morning, according to Wells Fargo, one of the nation's largest home lenders.
“It’s probably still a very good opportunity, if it makes sense, to refinance now," Habib, who founded the Holmdel, New Jersey-based real estate data and mortgage platform, told FOX Business’ Liz Claman on Thursday. "You will save a ton of money – you don’t necessarily lock in today, you could watch it and monitor it – but get that going because if it turns, you want to respond quickly. Be in application, be ready to close, be ready to lock.