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Will rates rise or remain relatively unchanged? Experts and Bankrate analysts predict where mortgage rates are headed over the next week.
For the coming week, (Oct. 28-Nov. 3), 63 percent of the panelists believe mortgage rates will rise; 31 percent believe rates will remain relatively unchanged (plus or minus 2 basis points); and 6 percent think rates will fall.
Click on the three tabs above to read the comments and rate predictions of mortgage experts and Bankrate analysts. 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.
Mortgage rates are likely to tick up prior to the Federal Reserve announcement, as investors hedge against a smaller-than-expected easing program.
Holden Lewis Senior reporter, Bankrate.com
I can’t make sense of mortgage rates lately. They went up this week, so I might as well guess that they’ll continue rising.
Kevin Breeland General manager, Residential Mortgage of South Carolina, Mount Pleasant, S.C.
Last week, I stated rates would increase by 0.125 percent. That really did not occur until Monday and Tuesday. It is my expectation, however, that the mortgage-backed securities market will continue to struggle for the next seven days.
I agree the Federal Reserve will get back into the bond-purchasing program to help stimulate the economy, and it is very unusual for midterm elections to create this much buzz. I believe rates will be volatile for the next seven days, up until the midterm elections are completed.
Derek Egeberg Certified Mortgage Planning Specialist and branch manager, Academy Mortgage, Yuma, Ariz.
The bond market has continued to sell off and rates have increased slightly. Look for continued increases as the equity markets strengthen.
Dan Green Waterstone Mortgage, author of TheMortgageReports.com, Cincinnati
Inflation talk replaces deflation talk. The big unwind follows.
David Kuiper Mortgage planner, First Place Bank, Holland, Mich.
The long ride of super-low mortgage rates seems to be taking a breather: Traders take some profits, and increased fears of inflation appear to be taking hold of the markets.
The Federal Reserve’s additional quantitative easing (read: print more money) isn’t being well-received by the bond market, as the oversupply of money has to lead to inflation (we don’t know when, but it will be ugly), and inflation is the archenemy of long-term fixed-rate bonds. With increased market volatility, now is definitely not the time to grow complacent and think these very low rates are here to stay.
Jeff Tufford Mortgage consultant, Monarch Consulting, Grand Blanc, Mich.
It looks like the Federal Reserve will be unveiling plans for a new bond-purchasing program over the next several months. It appears that traders have been hedging their bets regarding the extent of the influence this program announcement will have on markets. It was originally thought to be enough to move rates in a drastic fashion, but now the thinking is it will be less of a force than some thought.
Nonetheless, with rates going up leading to the announcement, it creates more of an opportunity for a rate decrease afterward. Even if rates go down only to what they were at the end of last week, it would still be better than what we are seeing this week.
Michael Becker Mortgage banker, Happy Mortgage, Lutherville, Md.
Yields on Treasuries and mortgage-backed securities have jumped the last few days, causing mortgage rates to rise. Is this the market predicting future inflation, or is it just a repositioning of assets ahead of next week’s midterm election and the Federal Reserve meeting? I think it’s the latter. Given the still-fragile state of our economy, I don’t see mortgage rates rising much.
Dick Lepre Senior loan officer, RPM Mortgage, San Francisco
We have uncertainty, so I am going with “flat.” Longtime bond market participants believe Treasury prices are too high. But if the Federal Reserve is going to do quantitative easing and not tell “how much” and “when,” no one in their right mind is going to aggressively short Treasuries.
QE will exert downward pressure on yields, but market participants know the Fed is going to create serious inflation. This is like a casino and the Fed is the bank. You can bet “inflation” on any spin of the wheel, but the Fed has an unlimited supply of chips and can rig the wheel by buying any amount it wants on a given day. Place your bets!
Mitch Ohlbaum Vice president of business development, Mortgage Capital Associates, Los Angeles
I think we have seen the entire upswing we are going to see for right now. The 10-year Treasury is trading at 2.68 percent, which is up 21 basis points since last week, and inflation is up slightly as well at 2.17 percent.
With the midterm elections upon us and the Federal Reserve meeting a week away, it was expected that rates would slightly rise this week. It is widely anticipated that the Fed will again implement a quantitative easing policy in an attempt to lower both short term and long term rates to try and stimulate demand.
Jim Sahnger Mortgage consultant, Palm Beach Financial Network, Stuart, Fla.
I say unchanged, but a lot of things are on tap in the next week that can bring changes to the rate environment, not the least of which is the election.
Tommy Xintaris Senior mortgage consultant, Houston
Since Thursday of last week, mortgage bonds have dropped over 90 basis points due to the uncertainty of QE2. I’m expecting bond investors to play it safe prior the Federal Reserve meeting, which at current trading levels should help keep current rates stable.