Tuesday, July 14
Written 10:30 a.m. EDT
UP OR DOWN?
: A reader named Cindy asks: "Are mortgage rates predicted
to go down next week? What things should I be considering before going ahead?"
Such simple questions. Such complex answers.
At Bankrate, we have something called the Rate
Trend Index, in which experts guess where mortgage rates will be in 35 to
45 days -- higher, lower or about the same. It's updated every Thursday morning.
Last week, one-fifth of the voters predicted that rates will go up, and the
rest were roughly evenly split between "down" and "unchanged."
My forecast was that rates would be unchanged.
The Rate Trend Index tries to predict rates a month away. Quite a few voters
chafe at this, and would prefer to predict rates for the next week. We'll consider
Anyway, last week a technical indicator in the bond market signaled that mortgage
rates would be likelier to rise over the next few days. This was a signal to
lock a rate, although I didn't notice it at the time. Indeed, they went up yesterday
afternoon, but not by a lot.
As far as what you should consider before going ahead: Do whatever gives you
peace of mind. That's my advice. If you get a good price on a house, and you're
offered a mortgage rate that gives you an affordable monthly payment, then lock
the rate so you can worry about other stuff.
By the way, if you wonder how accurate my Rate Trend Index predictions are,
I've gotten it right in 25 of the last 52 weeks. And I'm probably better at
predicting rates than you would be.
HAPPY BASTILLE DAY: Twenty-eight years ago tonight, three recent high
school graduates scrambled to the top of the Lake Worth dam outside Fort Worth,
Texas, and set a cardboard box ablaze.
Joe Self, Clayton Williams and I had decorated the box to look like the Bastille.
We had twisted off arms and legs of green plastic toy soldiers and painted those
and other "wounds" red, then glued them all over the box. Then, at
the lake, we filled the cardboard Bastille with firecrackers and lit a few.
After watching the flaming destruction, we doused one another with Champagne.
Then, filled with revolutionary spirit, we motored to nearby Shelby Lane and
liberated a street sign for my girlfriend Shelby.
Tonight, instead of celebrating through arson and theft, I'll snuggle with
my copy of "In the Shadow of Young Girls in Flower." Best book title
ever, but it's not the same as watching an ersatz Bastille burn.