Mortgage rates drop after China devalues its currency

Mortgage rates fell this week after China's economy suffered a major setback that disrupted international markets, and U.S. consumers lost some optimism in their outlook on the housing climate. The percentage of people who believe it's a good time to sell a home fell from 52% in June to 45% in July.

The benchmark 30-year fixed-rate mortgage fell to 4.04% from 4.1%, according to Bankrate.com's Aug. 12 survey of large lenders. A year ago, the rate was 4.27%. Four weeks ago, it was 4.17%. This week's rate is 0.01 percentage points higher than the 52-week average.

Will the Fed's 'liftoff' be pushed back?The "liftoff" could be pushed back due to current global concerns. "This really put a kink in their plan," says Brett Sinnott, vice president of capital markets at CMG Financial in San Ramon, California. If you're in the market to buy a home, don't move too hastily, Sinnott says.

China's economic troubles have created ripple effects elsewhere. U.S. government bond yields fell to near 3-month lows after the central bank in China devalued its currency this week.The 10-year Treasury bond yield fell from 2.23% Monday to around 2.09% Wednesday morning.

John Stearns, senior mortgage banker at American Fidelity Mortgage Services in Mequon, Wisconsin, agrees that patience is needed. There's a "lower risk (and) higher reward" for those who can wait and see how everything plays out, Brett Sinnott says.