Mortgage Rate Trend Index
Will rates rise or remain relatively unchanged? Experts and Bankrate analysts provide their insights.
This week (April 1 – April 7) the experts say: This week, 69 percent of the panelists believe mortgage rates will rise over the next week or so. Just 6 percent think rates will fall, while 25 percent think rates will remain relatively unchanged (plus or minus 2 basis points).
Industry experts and Bankrate commentary
The combination of the Federal Reserve's withdrawal from the agency mortgage-backed security market and the large supply of Treasury sales needed to fund the deficit will exert upward pressure on mortgage rates. I believe this upward pressure will be tempered by continued weakness in the economy and a flight to the relative safety of Treasuries necessitated by the potential for a sovereign default. I see mortgage rates rising slightly in the coming week.
Michael Becker, mortgage consultant, Green Pastures Mortgage & Finance, Lutherville, Md.
The economy -- and mortgage pricing -- is now jobs-dependent.
Dan Green, Waterstone Mortgage, author of TheMortgageReports.com, Cincinnati
The Federal Reserve's mortgage-backed securities purchase program has ended and volatility has entered the market. Larger-than-normal rate swings may become more prominent as we go forward. There is little to gain by waiting to lock a mortgage if you are closing within 60 days. Lock sooner versus later.
Chris Karageorge, senior home loan adviser, Universal American Mortgage Co., Wayzata, Minn.
We've seen a bit of an uptick in mortgage rates in recent days, and we're not likely to see much of an increase due to the Federal Reserve withdrawing from purchasing mortgage-backed securities as of April 1. Without the support of the biggest player in the market for over a year now, rates will be much more volatile, meaning more intraday price movement than we've seen recently. It is important to work with a mortgage professional with accurate information at their fingertips. As the economy begins to recover, rates will begin to creep up. So, that fact coupled with the pending expiration of the homebuyer tax credits makes NOW an opportune time to buy, build or refinance.
David Kuiper, mortgage planner, First Place Bank, Holland, Mich.
Pinocchio's nose keeps growing. Economic conditions are worsening despite government propaganda. The fastest and simplest way to keep the purchase and refinance market going are lower rates.
Jeff Lazerson, president, Mortgage Grader, Laguna Niguel, Calif.
For the past several years, I had been putting info into my opinion here each week about the technical forces that drive Treasury yields and mortgage rates. I stopped doing that a few months ago because I found the techs unreliable. The traditional patterns of daily and weekly cycles may be there, but had been producing insignificant swings. With the Federal Reserve out of the market, we may see these patterns emerge once again. I believe that we will see some annoyingly high volatility the next few months as the players in the market for mortgage paper get through spring training and start the season again. The underlying force could be higher Treasury yields driven by a deficit-fueled supply of Treasuries.
Dick Lepre, senior loan officer, RPM Mortgage, San Francisco
Regardless of how the Federal Reserve's exit from the mortgage-backed securities market, unemployment reports, and supply and demand for new home loans impact our interest rates, I'm advising my clients to lock if they're within 30 days of closing.
Mark Madsen, mortgage consultant, Raintree Mortgage, Las Vegas
While the 10-year Treasury is trading at 3.83 percent -- and that is up from the 3.65 percent range -- mortgage rates have not moved as much as Treasuries and they are still very attractive. The Feds are ending their mortgage-buying program today and while everyone has known about this for some time, many players still think rates will rise as the big player is out of the market. The contrarians (or maybe the smarter people) know that there is lots of cash on the sidelines to pick up the difference. In fact, the feds have been testing that theory for weeks in advance.
Mitch Ohlbaum, loan officer, Bank of America, Los Angeles
Rates look for a new normal after the Fed has "left the building." Expect greater volatility in day-to-day mortgage rates. So don't be surprised if you talk to two different lenders at different times of the day and get really different rates. Lock when rates make sense, as rates are still great.
Jim Sahnger, mortgage consultant, Palm Beach Financial Network, Stuart, Fla.
The end of the Federal Reserve's purchases of mortgage-backed securities is bound to trigger some rate volatility. Eventually, water finds its own level, and so will mortgage rates.
Chris Kissell, senior editor, Bankrate.com, North Palm Beach, Fla.
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.