mortgage
Mortgage Rate Trend Index
Will rates rise or remain relatively unchanged? Experts and Bankrate analysts provide their insights.
This week (Jan. 21 - Jan. 27) the experts say: Mortgage rates aren't moving much. This week, a solid majority 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 rise, and the rest think rates will fall.
Industry experts and Bankrate commentary
| Experts' comments | Panel |
The economy is still showing many mixed messages but a few things I am looking at closely: Oil reached $82-plus a barrel, but has dropped to less than $80 a barrel. Bonds had a good week last week recovering losses from the previous week but start(ed) the week in the red. However, I believe with all of the mixed messages, rates will remain in a holding pattern.
Kevin Breeland, general manager, Residential Mortgage of South Carolina, Mount Pleasant, S.C. | 
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The daily tech has been bullish since the beginning of the year but seems to have run out of steam. This rally has been restrained because the weekly tech has remained bearish. When the daily downcrosses to bearish (which it may do around Jan. 23) the daily and the weekly will be bearish and yields and rates should rise.
Dick Lepre, senior loan officer, RPM Mortgage Inc., San Francisco |
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The Fed can't risk a spike in rates when the bond-purchasing program stops at the end of March. So they will do whatever they can to prevent a deadly rate increase, which could include continuing the program past the deadline. This would put downward pressure on rates. However, the "I" word (inflation) reared its ugly head this week in the U.K. If investors fear the problem could spill over into the U.S. market, it would put upward pressure on rates. In the end, we are sitting right smack in the middle of the 25-day and 100-day moving averages, which suggests rates may do ... very little.
Chris Karageorge, senior home loan adviser, Universal American Mortgage Co., Wayzata, Minn. |
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The first effects of the Fed's market withdrawal are coming.
Dan Green, TheMortgageReports.com, Waterstone Mortgage, Cincinnati | 
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Rates have come back down to the high 4 percent range. Look for the government to press Fannie Mae and Freddie Mac to move to more reasonable underwriting standards for the lenders that get credit flowing again. Today's mortgage application process is akin to mental torture for consumers and loan officers.
Jeff Lazerson, president, Mortgage Grader, Laguna Niguel, Calif. |
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Tame inflation numbers and a stock market continuing to struggle continue to buoy the bond market, where mortgage money comes from. Rates should be stable in the near term. With the pending withdrawal of the Fed mortgage-backed securities purchase program and the homebuyer tax credits expiring in a few months, now is the time to take action and secure a low-rate mortgage, whether you are buying, building or refinancing.
David Kuiper, Mortgage planner, First Place Bank, Holland, Mich. |
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The direction of rates 35 to 45 days out is more difficult than normal to predict today as there are a number of unknowns, most of which evolve around the Fed's continued participation in the mortgage-backed securities market. If the Fed pulls out, as it is scheduled to do, rates will rise. However, there has been a lot of chatter that they will evaluate market conditions as they unfold, meaning, we really don't know what to expect although it appears they may remain engaged to a certain extent.
Based on this uncertainty, I am inclined to say rates should remain reasonably stable. As we get closer to the end of March, we will have a better idea of where we (will) be not only short term, but through 2010 as well.
Jim Sahnger, mortgage consultant, Palm Beach Financial Network, Stuart, Fla. |
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The 10-year Treasury is 3.64 percent, (and) while that is only 0.08 basis less than last week, the number is significant because we dropped below the 3.7 percent mark. The large auctions were received very well, and it is clear that foreign buyers are returning to the treasury market despite what they are saying in the press. If they continue this buying spree it could drive rates even lower. We are also seeing more interest in the mortgage-backed securities (or MBS), which is good news for government-backed conforming loans, but even more for the still stagnant jumbo market.
Mitch Ohlbaum, loan officer, Bank of America, Los Angeles | 
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While we wait for a clear indication from the Fed about whether or not the MBS purchase program will continue past March, I'm anticipating that rates will remain the same. However, I'm preparing my clients for worst-case pricing at a moments notice and to have their fingers on the rate-lock trigger.
Mark Madsen, mortgage consultant, Raintree Mortgage, Las Vegas |
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| Bankrate's analysts | Panel |
If we get a stock market correction, mortgage rates will fall. The next couple weeks will be telling.
Greg McBride, senior financial analyst, Bankrate.com |
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In the medium term, I think rates will rise. But they haven't been rising much, yet. So I'll predict more of the same -- steady rates -- while simultaneously telling you that you should lock if you're comfortable with the rate you're quoted. When mortgage rates finally rise, they will do so with a jolt.
Holden Lewis, senior reporter, Bankrate.com |
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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.