Mortgage Rate Trend Index
Will rates rise or remain relatively unchanged? Experts and Bankrate analysts provide their insights.
This week (Oct. 29 - Nov. 4) the experts say: Rates probably will rise. This week, two-thirds of the panelists believe mortgage rates will rise over the next 35 to 45 days. Another 8 percent think rates will fall, and the rest believe rates will remain relatively unchanged (plus or minus 2 basis points).
Industry experts and Bankrate commentary
Mortgage rates drift higher through Thanksgiving.
Dan Green, TheMortgageReports.com, Waterstone Mortgage, Cincinnati
The daily, weekly and monthly Treasury techs are all bearish (lower prices, higher yields), which should indicate higher rates. The day-to-day fluctuations in economic perception easily overwrite the techs. In the longer run the question is this: How much longer will the Federal Reserve continue to buy mortgage debt? There appears to be little appetite for mortgage debt from traditional investors. I do not think that the Fed can simply stop buying mortgage debt at the end of the first quarter of 2010 without killing the housing market and the mortgage business. I could even see the Fed continuing to buy mortgage debt and buying less Treasury debt. Confusing times.
Dick Lepre, senior loan officer, Residential Pacific Mortgage - SF, San Francisco
A number of factors this week are suggesting higher rates. First, Treasury is potentially extending the duration on their debt from 49 to 72 months, meaning longer dated debt issues will be forthcoming. Additionally, this week alone we have two-, five- and seven-year debt issues of $116 billion to help cover our deficit. During a period of recovery, we expect a flatter yield curve, yet today it remains steep at 250 basis points (10-year to two-year Treasury), which is about the same level as Aug. '03. Between Aug. '03 and Dec. '05, that spread went to zero (and even inverted).
Cameron Findlay, chief economist, LendingTree.com, Charlotte, N.C.
After a few weeks of extreme volatility, things seem to be settling down a bit in mortgage rate world. Positive economic reports are being tempered by negative ones -- remember that positive economic news typically leads to rates rising. As the Fed starts easing out of its purchases of mortgage-backed securities, though, the longer-term trend will be toward higher interest rates. Don't get too complacent thinking that rates will stay in the 5 percent range forever. Schedule some time with your local mortgage adviser and see how buying, building or refinancing at today's record low rates can impact your overall financial plan.
David Kuiper, mortgage planner, First Place Bank, Holland, Mich.
Rates should remain at these levels through the end of the year, aside from the occasional dip or jump due to knee-jerk reactions toward economic issues. However, as the Fed's mortgage-backed security- and Treasury-buying program winds down next spring, rates will go up. There is little justification to expect lower rates.
Chris Sipe, senior mortgage consultant, Mason Dixon Funding, Frederick, Md.
Homes need to be owned by consumers, not the banks. The inventory of millions of vacant homes continues to climb. This, coupled with increased unemployment and the locked out borrowers that don't qualify, will require lower rates and payments to get the huge backlog sold. It's a simple, direct government incentive that everyone can understand.
Jeff Lazerson, president, Mortgage Grader, Laguna Niguel, Calif.
Economic ghouls and goblins still lurk but extensive government borrowing and pressure on the dollar balance that out -- for now. Rates will eventually move higher, so don't wait too long.
Greg McBride, senior financial analyst, Bankrate.com
When rates rise this quickly, they are bound to take back some of the gains.
Holden Lewis, senior reporter, Bankrate.com
About the Bankrate.com Rate Trend Index
Bankrate.com surveys experts in the banking and mortgage fields to see if they believe certificate of deposit and mortgage rates will rise, fall or remain relatively unchanged. For the deposit index, the panel comprises banks, thrifts and credit unions that directly offer FDIC-insured certificates of deposit to the end consumer. For the mortgage index, the panel comprises mortgage bankers, mortgage brokers and other industry experts who provide residential first mortgages to consumers. Results from Bankrate.com's CD Rate Trend Index will be released monthly. Results from Bankrate.com's Mortgage Rate Trend Index will be released each Thursday.