Mortgage Rate Update July 9, 2015

Mortgage rates are mostly unchanged from the beginning of the week but we have gotten slight improvements on some loan programs.

The interest rate markets continue to respond to global influences including the ongoing Greek saga and China’s stock market.

Greek officials have sent a rehashed 3-year bailout proposal to creditors.  Apparently the deal does include austerity measures and economic reforms absent from previous negotiations.  There is also talk of a “Super” summit this Sunday.  Should a deal be reached I would expect US mortgage rates to increase by ~.125%.  As we know this situation is very fluid and sentiment can shift quickly making it hard to handicap.

In China the stock market has seesawed in the past few days.  After falling for 8 out of the past 10 trading days the Chinese stock market had its biggest daily gain in 6 years today.  For months analysts have been warning that Chinese stocks were overvalued and that the market was overdue for a correction.  Things began to unwind a couple weeks ago and the Chinese Government has had to intervene (51% of all stocks on the Shanghai and Shenzen markets remain suspended from trading).

The bottom line is when there is fear and uncertainty around the globe it prompts investors to seek “safe-havens” for their capital.  Typically this helps US interest rates move incrementally lower.

From a technical perspective conditions look promising for rates to improve in the coming days.  However, should a bailout deal be reached by Greece and its creditors it would likely pressure rates higher.  Tough call so I will go neutral.

Current Outlook: neutral