Mortgage rates kept moving lower today as global financial markets remain in distress.  This time around, the improvement wasn't as much about the bond market gains as it was about lenders getting caught up with yesterday's gains.  As we discussed yesterday, when it comes to adjusting rate sheets to match trading levels in financial markets (which is the core of mortgage rate pricing), lenders have a hard time keeping up with major volatility.  As such, rates were able to improve today even though stocks and bonds were mostly sideways.

The other thing to consider is the implication of being sideways at current levels.  Bond yields and stock prices fell to the lowest level of the year yesterday and then didn't even try to bounce higher today.  There are complicated words to describe what this means for market participants, but the thesis is that it's a form of acceptance of the move that just happened.  

Given the timing, it would seem that financial markets are eager to hear from Fed Chair Janet Yellen, who delivers her semi-annual congressional testimony over the next 2 days.  If she happens to say something that inspires rates and stocks to move higher tomorrow, there will be very limited opportunity to lock before lenders raise rates.  The average lender is currently quoting conventional 30yr fixed rates of 3.625% on top tier scenarios, with the 'runner-up' slot quickly shifting toward 3.5% from 3.75% yesterday.