mortgage

Mortgage Rate Trend Index

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

This week (May 13 – May 19) the experts say: Sixty-four percent of the panelists believe mortgage rates will remain relatively unchanged over the next week or so. Twenty-nine percent think rates will rise. Seven percent believe rates will fall (plus or minus 2 basis points).

Industry experts and Bankrate commentary
Experts' commentsPanel
Despite the announcement of a $1 trillion bailout by the ECB to combat the sovereign debt crisis, there will be lingering concerns about whether the bailout will work and the effects on the global economy of the austerity measures needed by the overly indebted nations. This will keep rates from rising. Mortgage rates stay flat for the coming week.
Michael Becker, mortgage banker, Happy Mortgage, Lutherville, Md.
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Mortgage rates are a function of two key elements: the risk premium (prepayment and credit exposure) and the underlying yield curve. For now, we expect the risk premium, or spread, will be limited to about 80 basis points or less, so it is in the yield curve where we expect most of the volatility -- just like we saw during the tail of last week's trading frenzy. Expect a market selloff (prices on bonds lower, yields higher) in the coming weeks as European debt concerns are extracted from the list of major concerns. After all, it's not that investors were flocking to U.S. debt because of value; it was simply one of the better alternatives from a list of bad options. For borrowers, this all translates to higher rates in the coming weeks.
Cameron Findlay, chief economist, LendingTree.com, Charlotte, N.C.
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Risk-taking returns. Mortgage rates suffer.
Dan Green, Waterstone Mortgage, author of TheMortgageReports.com, Cincinnati
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We've seen a nice little rally with mortgage rates over the last week. With the stock market continuing to struggle and the European debt crisis staying in the forefront of investors' minds, mortgage-backed securities continue to provide a "safe haven" for money. It's not the time to get complacent, though, as the economy is starting to show some signs of improvement. When that happens, coupled with any hints of inflation, we'll see rates begin to rise. Consult your local mortgage professional today to see how you can benefit from today's low interest rate environment.
David Kuiper, mortgage planner, First Place Bank, Holland, Mich.
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The housing recovery is becoming a heavy anchor on the economy. To offset stringent underwriting and loan qualification mandates, rates will come down.
Jeff Lazerson, president, Mortgage Grader, Laguna Niguel, Calif.
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The daily tech is bearish (higher rates). The weekly and monthly are bullish. In the short term, rates should be flat. The annoying thing is the gigantic volatility created by angst over Greece and eurozone debt in general. Mortgage rates have stayed fairly flat despite the ups and downs in the 10-year Treasury.
Dick Lepre, senior loan officer, RPM Mortgage, San Francisco
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Rates should remain flat while uncertainty continues to gloom over global markets.
Bob Moulton, president, Americana Mortgage Group, Manhasset, N.Y.
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Mortgage-backed securities are trading down and have fallen beneath a key floor of support. The Fed rate cut last week and a slight increase to core PPI do not translate favorably to mortgage interest rates. We've already seen rates increase about 0.5 percent over the past few days, but there is room for further price erosion.
Mitch Ohlbaum, loan officer, Bank of America, Los Angeles
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While there are several reasons to consider why rates should move higher, they seem to be pretty comfortable right now following last week's global concerns. I don't expect much of a change in rates, but risk still exists to move higher. So, lock early in the application process and lock soon if floating now.
Jim Sahnger, mortgage consultant, Palm Beach Financial Network, Stuart, Fla.
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There is a lot impacting rates right now, with the primary driver being uncertainty. Uncertainty brings volatility, which can lead to wild swings in rates like we saw last week. Short term, I see rates remaining in their current range. However, the market is waiting for a long-term push higher, and when it comes, the rise should be swift.
Chris Sipe, senior loan officer, Embrace Home Loans, Frederick, Md.
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All eyes are on Greece and the European debt crisis. With the IMF (International Monetary Fund) approving a $40 billion loan to Greece, investors may be drawn to the equity markets. However, I don't suspect any drastic rate movement overnight.
Tommy Xintaris, senior mortgage consultant, Houston
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Bankrate's analystsPanel
Mortgage rates are super-low and we can thank our friends on the other side of the pond for that. But will they get lower? I have trouble seeing that, barring an unforeseen shock.
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.

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