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Panel prediction
29% Up
7% rti-arrow-down Down
64% rti-arrow-unchanged Unchanged

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

This week (April 2 – April 8) the experts say: The likeliest outcome: rates unchanged. This week, nearly two-thirds of the panelists — 64 percent — believe mortgage rates will remain largely unchanged (plus or minus 2 basis points) over the next 35 to 45 days. Another 29 percent think rates will rise, and the other 7 percent believe rates will fall.

Industry experts and Bankrate commentary
Experts’ comments Panel
Retail mortgage rates are in the 4.5 percent range. What our government is offering consumers is better than a land grab. Do not complain. Be grateful and get in line for this virtually free money. Do not wait to do this because one day, we will all wake up to rates much higher than this.
Jeff Lazerson, president, Mortgage Grader, Laguna Niguel, Calif.
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Under normal circumstances, I would say higher. (But) with the Fed buying mortgage-backed securities in bulk, they are committed to keeping rates in the ballpark and low. Natural tendencies will be to drift higher, though, as the paper keeps on coming from Washington, D.C. Lock and close.
Jim Sahnger, mortgage consultant, Palm Beach Financial Network, Stuart, Fla.
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Mortgage-backed securities continue to trade in a very tight range. Recent positive action in the stock market is actually pressuring bonds from their near all-time lows. Please do not be misled by the media, (talking about) 4.5-percent interest rates when they really should be talking about 4.5 percent coupons, which actually represents 5 percent to 5.5 percent interest rates. Times are incredible, and I’m advising my clients to take advantage of a sure thing rather than speculating that things might get even better. Being at or near record lows is not the time to get greedy.
David Kuiper, mortgage planner, First Place Bank, Holland, Mich.
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You can’t fight inflation, you can only hope to contain it.
Dan Green, mortgage planner, Mobium Mortgage, author of TheMortgageReports.com, Cincinnati
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Several factors make guessing where mortgage rates are going elusive. First, the market is being driven by the Federal Reserve, which is also monetizing the deficit along with the various other props for the economy. Second, the margin that banks are making over the Fannie Mae wholesale price for mortgages is, at present, very large. That may be OK with the Fed, but this could become a populist cause if someone starts beating this drum. (You know like this: Pig banks create this problem and then profit from it instead of passing low rates along to the masses. Hey, I lived in Berkeley in 1968. I know how to do this.) Third, Treasury yields are unnaturally low because this is not a market situation. Take the Fed out of the mix and yields will shoot up.
Dick Lepre, senior loan officer, Residential Pacific Mortgage, San Francisco
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(Among) expected unemployment reports, the Fed’s commitment to purchase mortgage-backed securities and an emerging attitude on Wall Street that the bottom of the markets may be in sight, I believe these conflicting forces will help keep rates unchanged temporarily. However, if rates do move in any direction, I’m preparing my clients for it to be upward.
Mark Madsen, mortgage consultant, Raintree Mortgage, Las Vegas
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Rates will remain about the same. Even if mortgage-backed security pricing improves, lenders and wholesalers are still backed up with volume, and becoming increasingly more so as buyers and refinancers finally see the wisdom in getting off the fence and taking action.
Susan Woodard, home loan originator, Lakeland Mortgage, Minneapolis
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Spreads between 30-year, fixed-rate mortgages and 10-year Treasuries have narrowed to the same levels (about 221 basis points) prior to the large debt market rally from March 18, helping current national average borrower rates hover at 4.91 percent (plus 1 point). Because of this, we don’t expect them to narrow much more unless we see another debt market rally. In other words, rates aren’t going any lower from here. The Fed continues to manipulate the rates lower by buying back U.S. government debt issues. However, the magnitude of these efforts is still unclear. We have seen at least $18 billion purchased in the last week, which continues the steady stream of positive news for consumers.
Cameron Findlay, chief economist, LendingTree.com, Charlotte, N.C.
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Rates will remain flat.
Bob Moulton, CEO, Americana Mortgage Group, Manhasset, N.Y.
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Last week (when I did not write) the Fed did exactly what I said it should and would do for months now, which is buy Treasuries and mortgage-backed securities. This action resulted in a steep drop in rates last week that, as always, was short-lived. I hope everyone took that opportunity to lock. The Fed is going to continue buying to try and keep rates down, but they are having trouble getting and keeping rates at 4.5 percent. The even larger (Fannie and Freddie) loans up to $729,250 will become available this month.
Mitch Ohlbaum, president, Legend Mortgage Corporation, Los Angeles
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I see rates holding here for the near term. However, the interim CEO of Freddie Mac recently stated that he feels mortgage rates have reached a bottom, and I would agree. Unprecedented “rate-friendly” events have gotten us to these levels. So what else is there? The only surprises that could come are more than likely not rate-friendly ones. As the economy starts to show signs of life, investment dollars will flow out of mortgage-backed securities and rates will climb in the long term. Don’t be greedy, lock in the best rate you will ever see.
Chris Sipe, senior mortgage consultant, Mason Dixon Funding, Frederick, Md.
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Bankrate’s analysts Panel
Lenders are struggling to keep up with the demand created by the tsunami of refinance requests. As a result, rates may rise a bit.
Chris Kissell, senior editor, 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.