WHOA! 10 Year Treasury Bond Just Broke 3% for 1st Time in 7 Yrs!

HUGE jump in US Treasury Bond interest rates over the pas 20 months or so. In fact, as of today, 5/15/2018, the 10 Year is at its highest since 2011! Now, lots of people will conclude things about how this increase affects their portfolios. BUT, what gets overlooked during these times of increasing interest rates is the affect on the mortgage/real estate market. Think about it like this: Couple want to buy a home. They have a monthly budget of $850 for that home. When interest rates were what they were in July 2016 they could have afforded a $250k home (just using the 10 year rate as our proxy for the interest rate they paid on their mortgage.) Now, though, with the 10 year at 3.05%, that same $850 could only buy a $200k house! So, what happens to the couple who bought a house in July 2016 for $250k fully leveraged, i.e., no equity, and need to sell it today? Their potential buyer can't afford the price anymore. Thus the seller is stuck. Moral? Watch the 10 Yr Bond!