Treasury Rally Triggers Mortgage Refinancing

Bloomberg reports myDecember 2006:

U.S. Treasury Rally Triggers Mortgage Refinancing (Update2)

By Michael McDonald

Dec. 18 (Bloomberg) -- Homeowners may give the biggest Treasury rally in four years a boost as falling bond yields trigger a rush to refinance mortgages and increase demand for government debt.

Mortgage refinancing applications reached the highest level in a year this month as average rates on 30-year home loans fell to a 14-month low, according to the Mortgage Bankers Association. Demand for home loans helped push yields on 10-year Treasuries to 4.4 percent on Dec. 1, the lowest since January, because investors who own bonds backed by mortgages tend to buy government debt when they get their money back early.

Read the entire article at bloomberg for a lot of technical jargon related to the investment and securities tied in with mortgage monies.