International investors hold over 20% of all U.S. agency bonds and mortgage-backed securities, according to a University of California/Mortgage Bankers Association study.Among other findings of the study by the University of California's Ashok Bardhan and Dwight Jaffee was that the Chinese demand for U.S. mortgage-related debt lowered U.S. mortgage rates by approximately half a percentage point. The authors said a shift by Chinese investors away from purchases of U.S. mortgage debt or other dollar assets and into the buying of euro- or yuan-denominated assets could notably raise U.S. rates.
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