Mortgage rates are modestly lower today for 30-day locks.
Despite treasury auction results from yesterday that are not encouraging; mortgage rates have managed to fall slightly on unanticipated news out of China.
The Chinese stock market fell 5.0% today on concerns that the Chinese Government would intervene in the economy to slow down the stock market. Up until today the Chinese stock market had risen 89% on the year.
Since China is one of the biggest consumers of US-denominated bonds this move has diverted assets away from their domestic stock market and created additional demand for mortgage-backed bonds. This is why mortgage rates have managed to move modestly lower.
As I explained on Monday, we still believe that the higher than average supply of US treasuries in the marketplace will do more harm than good. We will keep our bias towards locking.
Current Outlook: bias towards locking on short-term transactions