Wakefield, Reutlinger agent,
Mary Lowry, who is well known
in the horse community, has
produced a wonderful video
about the World Equestrian
Games coming to the Kentucky

horse sports, showcasing 8
different equine disciplines.
Over 50 nations are expected

anticipated to have a $150+
million impact on the state of
Kentucky, plus NBC will provide

WEG runs from September 25‐
October 10, 2010. For more
information visit alltechfei‐

present the WEG video at your
club or civic event. She can be
contacted at 552‐1477

The 10-year Treasury yield has risen to about 3.9 percent in recent days. It had averaged 3.3 per- cent in 2009, and was at around 3.7 percent in the first quarter of this year.

The reason for the rise in 10-year Treasury could be from investors’ belief in economic recovery and a shift away from risk-free assets (as in Treasury). Another reason is due to a very high budget deficit. The government can only finance such large loans by offering higher rates to investors.

The 30-year mortgage rate is priced off the 10-year Treasury. Typically the spread is about 150 basis points (or 1.5 percentage points); this means that if the Treasury is 3.9 percent, then the average mortgage rate will be higher by 1.5 percentage points to 5.4 percent.

By year’s end, the Treasury yield is expected to rise to 4.2 percent according to the Blue Chip Consensus Forecast. That would mean that the average mortgage rate on FHA and conventional loans will be 5.7 percent by the end of the year, assuming normal financial market patterns.

GDP 2010 Q1: +2.5% GDP 2010 Q2: +1.8%
GDP 2010 Q3: +2.3%
Unemployment rate by the year-end 2010: 9.9%
Average 30-year fixed mortgage rate by the year-end
2010: 5.7%
The U.S. government’s borrowing rates shot up the
past two weeks. That means borrowing rates for
nearly everything will also rise.
The only borrowing rates that might fall are for com-
mercial real estate and jumbo residential mortgages.

Because of the lingering effects of the financial market crisis, non-conventional and non-government backed mortgages of jumbo and commercial real estate had been largely frozen. But as the financial market exhibits clear signs of stabilization and as banks continue to build up their capital buffer, it is only a matter of time before lenders start lending to non-government backed sectors. So the underwriting standards for jumbo and commercial real estate mortgages will become less stringent over time.