Yesterday afternoon mortgage rates increased but have reversed lower this morning to match levels yesterday’s ‘rate update’.
Mortgage rates improved this morning in response to weaker equity markets around the world. The Chinese Shanghai Composite Index lost 4.3% overnight. It is now off 20% in the past 2 weeks. Here in the US stocks opened up lower but have managed to claw back close to even in the last few minutes.
If you are a regular reader of ‘rate update’ then you know that mortgage-backed bond prices (MBS) often trade inversely with stocks (if not, click this link); especially in the absence of other economic data.
Tomorrow the US Treasury will announce the volumes of their auction schedule next week. This announcement has hurt mortgage rates each of the past two times the announcement has been made. We are going to recommend a short-term locking stance.
Current outlook: locking in short-term