Mortgage Rate Update September 25, 2014

Mortgage rates are at their best levels since September 8th.

A “flight-to-safety” is helping mortgage rates this morning.  Investors are piling into US-dollar denominated debt in response to concern over the strength of China’s economy and raising tensions between Western countries and Russia.  Geopolitical uncertainty helps mortgage rates remain low.

International story-lines are driving interest rates today but that may change tomorrow when we get the latest read on Q2 US Gross Domestic Product (GDP).  Expectations are that the report will show the US economy grew at a 4.6% pace.  A number north of that figure may cause rates to worsen and vice versa.

From a technical standpoint mortgage-backed bond prices and the yield on the US 10-year treasury yield are both trading against resistance.  This rally may have run out of steam which is why I will shift to a locking bias.

Current Outlook: locking