Worried about the Impact of Interest Rates on Real Estate?

Interest rates have been at historically low levels for some time now, but did you know that in 2016, 30-year treasury yields almost took out the historical lows of 1946?

Is there a change in the wind for Interest Rates?

TradingMotives regularly reports on interest rates including 30-year Treasury Yields and bonds. The red Median Line applied from October 1981 in this monthly chart of $TYX 30-year Yields has acted as resistance more than 12 times (red circles) since 1984, so it has strong validation and has defined the downtrend extremely well, regardless of volatility.

There has been a change in behaviour on in interest rates and yields on lower timeframes. On this monthly chart, a change in trend, (or a deeper correction) would need to breach the Median Line (> 3.30 on this chart) and then breach the upper parallel (see the larger pink circle). Yields in Oct 2017 are currently oscillating around the lower parallel.

Charts on lower timeframe show some signs of change of behaviour and Median Line Analytics on those charts identified some excellent trades in Bonds and T-Notes since the 2016 low in $TYX.

What about Real-estate?

This is the weekly chart of the US Real-estate Index. There was a strong trend from the 2009 lows, but since January 2015, index behaviour has been sideways. While there is a potential relationship between interest rates and the real estate index, TradeMotives prefers to look at the behaviours of each on their own merits. The red and green sliding parallels are the ones to watch on this chart. Thosw lines represent important support and resistance. A breach either way will yield valuable information.

The Charts on interest rates are “Helicopter View”. Why bother?

That’s simple, if you can see the trees, then you can trade the wood more successfully.