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

This week, 60 percent of the panelists believe mortgage rates will remain relatively unchanged (plus or minus 2 basis points) over the next 35 to 45 days. The rest are split equally among those who think rates will rise and those who predict rates will fall (plus or minus 2 basis points).

Industry experts and Bankrate commentary
Experts’ comments Panel
I don’t know what government Kool-Aid that Ben Bernanke’s speech writers are drinking but I want some. Predicting an economic recovery by 2010 and distancing the government from the inevitable taking over the banksters is quite the optimistic hallucination.
Jeff Lazerson, president, Mortgage Grader, Laguna Niguel, Calif.
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Rates are showing stability in the face of weak economic data and increasing supply of bonds from both Washington and Wall Street. From a technical standpoint, bonds have been hampered recently by heavy layers of trading resistance so improvement will be difficult from here.
Jim Sahnger, mortgage consultant, Palm Beach Financial Network, Stuart, Fla.
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Rates are pushing up against stiff resistance, and with the stock market testing new lows and ripe for reversal, interest rates will not be going lower in the near term. It remains to be seen what will happen with continued Fed/Treasury bond purchasing in combination with potentially increased demand generated by the Homeowner Affordability and Stability plan. I’m advising my clients to lock in their rates while they are still near record lows.
David Kuiper, mortgage planner, First Place Bank, Holland, Mich.
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The yo-yo action continues. Up and down, always returning to the starting position.
Dan Green, mortgage planner, Mobium Mortgage, author of TheMortgageReports.com, Cincinnati
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We have seen rates drop to a point that has produced a short-term bounce effect. I expect to see rates slightly higher in the short-term, but not rising back to levels we have seen in previous months. The real estate market and the economy in general need a boost, and I expect to see interest rates remain attractive, at least until we get more indication that a recovery is in the making. Those with ARMs should enjoy the relief and use the opportunity to reconsider locking in something more permanent again while you can.
Jason Flurry, president, Legacy Partners Financial Group, Woodstock, Ga.
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Rates will go largely where the Fed drives them, but there are some structural problems with the mortgage business which are making it difficult to fund loans quickly. One is the enormous decrease in the size of total warehouse lines. Mortgage banks and operations such as ours which is a “net branch” model (a mortgage bank which only takes business from its branches and not brokers) depend on warehouse lines of credit from commercial banks to fund the loans which we then sell. According to MBA (Mortgage Bankers Association) total warehouse capacity has decreased from $200-$250 billion to $20-$25 billion. The problem here is that refis occur in spikes when rates dip and there is not enough gross capacity to meet the demand created by dips in rates. Perhaps it is time for the Fed or Treasury to guarantee warehouse lines in the same manner in which it backed Commercial Paper.
Dick Lepre, senior loan officer, Residential Pacific Mortgage, San Francisco
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Thirty to 45 days is a long time out to predict anything in this market. We anticipate the feds to cut rates again on the 29th, which typically will have a negative impact on mortgage rates. We will see some up and down activity in between leaving rates unchanged.
Steve Levitt, vice president of mortgage lending, Guaranteed Rate, Chicago
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Bankrate’s analysts Panel
The easing of some concerns about the health of mortgage insurers should allow the mortgage-Treasury spread to tighten up, bringing mortgage rates a bit lower.
Greg McBride, CFA, senior financial analyst, Bankrate.com
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It looks like the Fed will cut short-term interest rates again. It’s perfectly plausible that further rate cuts will exacerbate inflation and cause long-term mortgage rates to rise. That probably will happen in the long run. But over the next 35 to 45 days, I’m guessing that a falling tide will lower all boats, to use a clumsy metaphor.
Holden Lewis, senior reporter, 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.