Dec. 28 (Bloomberg) -- If Morgan Stanley is right, the best sale of U.S. Treasuries for 2010 may be the short sale.
Yields on benchmark 10-year notes will climb about 40 percent to 5.5 percent, the biggest annual increase since 1999, according to David Greenlaw, chief fixed-income economist at Morgan Stanley in New York. The surge will push interest rates on 30-year fixed mortgages to 7.5 percent to 8 percent, almost the highest in a decade, Greenlaw said.
We are not close to a bottom in home prices, especially in Sonoma County where we have more Option-ARMs than almost anywhere in the country. Major resets/recasts begin next year.
And there is little doubt that mortgage rates heading higher will push housing prices lower across the board. Buyer beware.