Mortgage Rate Update september 22, 2014

Mortgage rates have improved modestly from the last ‘rate update’.

This morning, Interest rates are benefiting from comments made by a Chinese Government official.  China’s Finance Minister commented that he did not expect to change economic or monetary policies in response to recent weakness in the Chinese economy.  China is the world’s 2nd largest economy so when their economy slows it will likely create ripples around the globe.

In the housing market, the National Association of Realtors released data showing that the pace of existing home sales slowed in August from July.  At first glance this may appear to be a gloomy report but in fact most of the decline was due to fewer distressed home and investor transactions.

The economic calendar is fairly short this week but has some significant data points scheduled for Friday.

From a technical perspective the yield on the US 10-year treasury note, which mortgage rates loosely follow, did touch 2.65% and reverse lower late last week.  Last Thursday I recommended a “carefully floating” position with the hopes that this may happen.  I will continue to float as long as yields are trending lower.

Current Outlook: floating