Mortgage rates move sharply higher for a 2nd straight day, now fully erasing all of the improvement seen since July 1st.  The same risky, volatile overseas events that helped rates fall earlier this week are now pushing in the opposite direction.  Specifically, fears over a more pronounced Chinese stock market crash have subsided after 2 days of gains.  Even more of a focus for financial markets is the fact that Greece maintained a surprising amount of traction this week in their efforts toward securing more bailout funding. 

Both of these situations had previously caused investors to seek safety in the bond markets of big, stable countries like the US.  Extra demand in bond markets results in lower rates, as seen earlier this week.  But even as rates were falling, we discussed the fact that these underlying reasons were not the sort of stable motivations we should rely on for long term improvement in rates.  The past two days show us why.  When these types of events are moving markets, things can change quickly and significantly.  Monday will be no different, as the success or failure of the weekend negotiations with Greece could have a huge impact on markets.

Today's losses bring the average conventional 30yr fixed rate quote back within a range of 4.125-4.25%.  The move up from the previous 4.0%-4.125% range was already in progress yesterday, but today's weakness solidifies it.  It goes without saying that locking continues to be the only advice for borrowers who don't want to gamble with market volatility.  Rates can always improve, (and likely will improve if Greece fails to make a deal this weekend), but the risk of floating over the weekend is greater than the reward.