I am often asked should I lock or should I float by my clients.  This is a very difficult question as the determining factors that define rate movement have their own unique drivers tied to overall economic sentiment.  Understanding one simple relationship is the key to the lock decision and, actually, most clients can make an informed decision in their own right. 

If you simply consider that as a basic rule bond move counter to stocks.  When the stock market falls, the money needs to find a home and the home is often in bonds and treasuries.  Mortgages, after closed, are structure basically as a bond.  When a large amount of money pours into the bond market, the return required for investors usually drops.  With this the rate required on a mortgage that will be later sold into the market drops as well.  The end result, a lower rate for you when you lock at that time.

Take, for example, the current issues in the European Union.  On the surface, you might ask how a debt crisis in Greece has anything to do with a decision on whether or not to lock your loan on a purchase in Lincoln Park.  When considered in the macro, however, you should not only be watching this crisis, but also actively rooting against any resolution during your loan approval.  This is simply because the fears about Greece and the EU as trading partners strikes fear into the heart of the stock market.  As an added benefit to mortgage rates, the alternatives to stocks shrinks as investors avoid government debt in Europe, i.e. US Treasury Bonds become more appealing.  You can connect the dots from there.

In summation, I look at this as an informed buying decision.  Knowledge empowers you to know when to make a material decision as well as to assess whether or not your lender knows what he or she are talking about.  By no means should you be able to analyze the markets at the level of an economist.  A little knowledge, however, could provide you a flashlight to light the way through the apparent darkness in which you may currently find yourself.