The rate is now at 7.25 percent, but I understand that by watching the bond market I can tell when the rate might fall lower, and I could time my lock-in accordingly.
Mortgage rates do tend to move in tandem with bond rates.
A mortgage bond represents partial ownership of a bundle of mortgages, and the investor receives income as homeowners make their monthly payments, just as a bond investor gets interest payments. Because the average mortgage is kept around for only 10 years or so before the property is sold or the mortgage is refinanced. But the two rates tend to move in the same direction because they both are driven by the similar forces of supply and demand. When rates on 10-year Treasuries fall, investors may shift money out of the Treasuries and into mortgage securities paying higher rates. But the heavier demand for mortgage securities would then make their prices rise, causing their interest rates, or yields, to fall.