Interest rates on mortgages closely follow the bond market, more specifically, the 10-year Treasury bond. Bonds move in increments of 32nds, and they move every day. As the price, or change on these bonds go down, the yield and interest rates go up. Bonds down, rates up. For example, if the 10-year bond is down 16/32nds, discount points on a given interest rate will go up one-half a point (fractionally speaking, 16/32 equals one-half). As the change on these bonds go up, the yield and interest rates come down. Bonds up, rates down. For example, if the 10-year bonds are up 8/32nds, discount points are likely to fall one-quarter of a point. But what makes the bonds move? There are many global factors that we can't foresee, howe
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