Mortgage Rate Trend Index
Will mortgage rates rise or remain relatively unchanged? Experts and Bankrate analysts provide their insights.
This week (Dec. 17 - Dec. 23) the experts say: There's no consensus, as voters are almost evenly split. This week, a plurality of the panelists believe mortgage rates will remain relatively unchanged (plus or minus 2 basis points) over the next 35 to 45 days. About one-quarter think rates will fall, and the rest believe rates will rise.
Industry experts and Bankrate commentary
Pressure is building at the long end of the yield curve. Concern over future inflation, the exploding budget deficit, and a rebounding economy are helping drive long-term rates higher.
Mike Larson, interest rate and real estate analyst, MoneyandMarkets.com, Jupiter, Fla.
The stochastic techs are bearish (lower prices, higher yields) and PPI was well above consensus. Higher rates until Santa comes.
Dick Lepre, senior loan officer, Residential Pacific Mortgage - SF, San Francisco
Home shoppers and refinancers have vanished. The mortgage market has hit the end of the year wall as consumers are thinking about the holidays. Look for rates to drop again after the first of the year in order to kick start the stalled market.
Jeff Lazerson, president, Mortgage Grader, Laguna Niguel, Calif.
Until we get closer to March and the Fed doesn't blink on stopping their MBS purchases, rates will fluctuate but not go anywhere substantial, barring any bizarre economic numbers, of course.
Tom Vanderwell, StraightTalkAboutMortgages.com, Fifth Third Bank, Grand Rapids, Mich.
Mortgage rates have climbed about 0.25 percent since their recent lows on Nov. 30. I believe that this rise in interest rates is being caused by the market's perception of economic data. "Better than expected" is a term we seem to be hearing a lot lately, but better than expected is not necessarily good economic news. The recent rise in mortgage rates reminds me of this past summer when better than expected corporate profits caused the stock market to rally and interest rates to rise. Just like then, a robust recovery will fail to materialize because of high unemployment and a weak consumer causing mortgage rates to come back down. I have one caveat to my prediction. The Fed is scheduled to stop supporting low mortgage rates (by buying mortgage-backed securities) at the end of March and the withdrawal of this support could cause rates to rise early next year.
Michael Becker, mortgage consultant, Green Pastures Mortgage & Finance, Lutherville, Md.
I think rates will decrease slightly. In the short term, MBS seem slightly oversold and I believe rates should improve from current levels as the market stabilizes from the sell-off that occurred earlier in the week.
Mortgage rates have trended up over the course of the week as stronger economic data put pressure on fixed income securities. Although those numbers in conjunction with more robust nonfarm payrolls data paint the picture of an improving economy, challenging headwinds still persist and Fed policy of keeping federal funds low for the foreseeable future should remain intact.
John Walsh, president, Total Mortgage Services, Milford, Conn.
We saw rates drift up about 0.25 percent over the last week due to some inflation concerns. Those concerns have been temporarily alleviated with reassurances from the Fed that they will continue to hold rates down. Rates are poised to increase, though, in the slightly longer term as the Fed discontinues it purchases of mortgage-backed securities, which have been keeping interest rates artificially low. As property values in many parts of the country begin to stabilize, now is the perfect time to purchase a new home. Waiting for further price reductions in the face of increasing interest rates is not a good strategy.
David Kuiper, mortgage planner, First Place Bank, Holland, Mich.
The Fed just bought the mortgage markets another 30 days of low rates.
Dan Green, Mobium Mortgage, author of TheMortgageReports.com, Cincinnati
Rates are up off their lows from early in the month. While I think we will see some volatility over the next six weeks, we will more or less remain range bound before resuming an upward climb in rates through the quarter and year. The best rates you'll see in the next twelve months are now.
Jim Sahnger, Mortgage Consultant, Palm Beach Financial Network, Stuart, Fla.
The Fed will be reeling in the lines of liquidity in 2010 but are in no hurry to raise short-term interest rates. This should keep a lid on mortgage rates for a few weeks.
Greg McBride, senior financial analyst, Bankrate.com
I expect rates to rise in 2010. But not in the next 45 days.
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.