mortgage
Mortgage Rate Trend Index
Will rates rise or remain relatively unchanged? Experts and Bankrate analysts provide their insights.
This week (Feb. 25 – March 3) the experts say: This week, half of the panelists believe mortgage rates will rise over the next week or so. Just 10 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
| Experts' comments | Panel |
Core CPI was down 0.1 percent last week, consumer confidence came in at a 10-month low, and a new Gallup poll says 20 percent of Americans are either unemployed or underemployed. With no inflation (and perhaps some deflation), a concerned consumer and high unemployment, mortgage rates will remain low despite the Fed ending its purchases of mortgage-backed securities. I do expect rates to rise once the Fed stops these purchases, but I think underlying economic weakness will put a ceiling on how high rates rise. For now, mortgage rates hold steady.
Michael Becker, mortgage consultant, Green Pastures Mortgage & Finance, Lutherville, Md. | 
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Truthfully, I don't have the foggiest notion of what this market is going to do. One week reports come out signifying a strengthening economy (bad for rates), the next a weakening one (good for rates). The government will stop its investing practice in one month (bad), but some indicators point to a possible double dip (good). Inflation has to become an issue at some point (really bad). No one has been trading on fundamentals in years, which translates into ridiculous volatility as investors try to position themselves. However, I believe rates will remain at current levels in the very short term.
Chris Sipe, senior loan officer at Embrace Home Loans in Frederick, Md. |
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I believe our current rate environment is coming to an end. Last week, we saw rates increase. Then, with the increase in the discount rate and consumer confidence coming in lower than expected, we saw a slight decline in rates. Federal Reserve Chairman Ben Bernanke starts his testimony today (Wednesday) and everyone wants to hear the Fed is committed to decreasing its balance sheet and slowing the flow of money, while also standing ready to raise rates to curb inflation. I believe they are (ready to raise rates). So, one more week of no change.
Kevin Breeland, general manager, Residential Mortgage of South Carolina, Mount Pleasant, S.C. |
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Mortgage bonds continue to be the beneficiary of negative economic news, and we've recovered the losses we experienced last week. Weakening consumer confidence and falling new home sales have been the primary driver here. For now, we'll continue to enjoy and take advantage of the incredible rate environment that we've been gifted with. With interest rates poised to increase in the not-too-distant future though, now is not the time to be complacent, but to take action.
David Kuiper, mortgage planner, First Place Bank, Holland, Mich. |
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The techs are hopelessly confused and while there may be short-term downward pressure, the only thing folks should be attentive to is the fact that rates are going to move up at the end of March as the Fed exits the market. Everything else is just a light.
Dick Lepre, senior loan officer, RPM Mortgage, San Francisco | 
up |
The 10-year Treasury is trading at 3.67 percent, which is 16 basis points lower than the 2010 high of 3.83 percent on Jan 8. Back in January, the inflation component was 2.47 percent, and today we are at 2.2 percent. That decrease of 27 basis points is a great sign of what the market is seeing and a good indication that at least for now, rates are down and will stay down.
Mitch Ohlbaum, loan officer, Bank of America, Los Angeles | 
down |
The last week has shown a lot of volatility in mortgage-backed securities which led to a range of rates of about 0.25 percent from high to low for borrowers on zero-point loans. Look for rates to start trending higher to April and beyond.
Rate shoppers beware, a lot can happen in a matter of hours and days. In 2008, from Feb. 29 to March 6, rates popped for nearly a point. While I don't expect a repeat, jump on great rates now.
Jim Sahnger, mortgage consultant, Palm Beach Financial Network, Stuart, Fla. |
up |
| Bankrate's analysts | Panel |
Expect Federal Reserve Chairman Ben Bernanke to use tempered language in an effort to hold off the inevitable rise in mortgage rates. But it's coming, folks.
Greg McBride, CFA, senior financial analyst, Bankrate.com, North Palm Beach, Fla. |
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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.