Mortgage Rate Trend Index

Panel prediction

Will rates rise or remain relatively unchanged? Experts and Bankrate analysts provide their insights.

This week (March 18 - March 24) the experts say: Rates are likely to stay the same or maybe rise. This week, a majority of the panelists believe mortgage rates will remain relatively unchanged (plus or minus 2 basis points) over the next week or so. About one-third believe rates will rise, and the rest believe rates will fall.

Industry experts and Bankrate commentary
Experts' commentsPanel
The Fed's feelings appear upbeat on many economic sectors, but not housing. The MBS purchase plan will still end in March, according to the Fed. We probably won't see its effects in the next week or so. The market remains in a holding pattern.
Chris Karageorge,, Universal American Mortgage Co., Wayzata, Minn.
I am sticking with "higher" solely because of the impending exit of the Federal Reserve from the GSE paper market. FOMC announced that it intends to keep rates low for an extended period. There are two clear schools here: the traditional Keynesians are fine with lots of government spending to support the economy. The other school which must have been the one which Thomas Hoenig, president of the Kansas City Fed, graduated from, sees low rates as discouraging lending and investing. Their point of view is that the economy needs higher rates to grow. This is best explained by what is called the IS/LM model which, while no longer in wide use, has some value. See:
Dick Lepre, senior loan officer, RPM Mortgage Inc., San Francisco
On Tuesday, Federal Reserve officials repeated their pledge to keep rates low for an "extended period." They kept the federal funds rate unchanged at zero percent to 0.25 percent. This is a short-term rate and often has very little to do with long-term rates like mortgages. More important to mortgage rates was the Fed's reiteration that they were sticking to their plan to end the purchase of mortgage-backed securities March 31. Many analysts believe that once this support for low rates ends that mortgages will jump, and some are expecting a dramatic rise in mortgage rates. Given the fact that everyone knows that the Fed is ending this program in two weeks, shouldn't mortgage rates and the yields on mortgage-backed securities have started to rise? In fact, the spread between mortgage-backed securities and the 10-year Treasury reached an all-time low earlier this week. This is the opposite of what should happen if mortgage rates are set to rise. This leads me to conclude that the market believes there will be buyers to replace the Fed once they complete their exit. The bigger question is: What happens to mortgage rates once the Fed starts selling their holding of mortgage-backed securities? I think mortgage rates will rise a bit when the Fed removes its support -- I just don't think the rise will be that drastic. For the next week, rates hold steady and rise slightly afterward.
Michael Becker, mortgage consultant, Green Pastures Mortgage & Finance, Lutherville, Md.
The complete absence of inflation leads rates lower.
Dan Green,, Waterstone Mortgage, Cincinnati
It appears that new buyers for mortgage-backed securities like what is being underwritten today as the Fed is winding down its purchases. The loans being locked recently are not loans that the Fed will be buying, and rates have held relatively steady since the end of February. While I still maintain that rates should be rising from where we are as we progress into the year, they don't appear to be in a hurry. That said, if we increase a little over the next week, I would not be surprised, and more risk still lies in floating.
Jim Sahnger, mortgage consultant, Palm Beach Financial Network, Stuart, Fla.
Bankrate's analystsPanel
The Fed is wrapping up its mortgage purchases, so we can soon expect a pickup in volatility followed by a pickup in rates.
Greg McBride, CFA, senior financial analyst,, North Palm Beach, Fla.
Newton said that when a body is at rest, it tends to remain at rest. Mortgage rates have been practically at a standstill in recent weeks. Inertia will keep them there until some event nudges them. Then they'll probably go up.
Holden Lewis, senior reporter,, North Palm Beach, Fla.

About the Rate Trend Index 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's CD Rate Trend Index will be released monthly. Results from's Mortgage Rate Trend Index will be released each Thursday.


Connect with us