Where are interest rates going?

Arm chair Atlanta mortgage rate watchers may be a little confused with what really amounts to a minor reduction in home mortgage rates over the past week.  With the somewhat more dramatic fall in 10-year Treasury yields over the same period of time, many would have been hoping to see a rather bigger reduction in Atlanta mortgage rates this week.  This did not materialize.  However, as most of us know, historically there has been a correlation between 10-year Treasury yields and Atlanta mortgage rates.  So why such a small reduction in Atlanta mortgage rates this past week when compared to the reduction in 10-year Treasury yields?  The simple answer to this question is the problems being encountered in the sub prime mortgage rate sector.  While it could well be argues that the sub prime mortgage rate sector should not have any bearing on the home mortgage rates tracked by Bankrate.com, who only tracks the prime mortgage sector, noises being made this week clearly indicate that all is not well and everything is not under control in the sub prime sector, as had at first been believed.  Indeed, problems in the sub prime sector in the US are having far reaching consequences: from Australia to the United Kingdom.  It should come as no real surprise then that any gains made in the reduction of the 10-year Treasury yield have been partially offset with concerns within the sub prime sector.  Even with a further reduction in 10-year Treasury yields in the coming weeks and months, American homeowners should anticipate fairly flat movements in Atlanta home mortgage rates over the remainder of this year.