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Holden Lewis
Past posts from Holden Lewis's Web log about mortgages and real estate, and how they are affected by the economy.
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Rate trends and firecrackers

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 changing.

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.

-- Posted: Jul. 14, 2009

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