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Panel prediction
9% Up
55% rti-arrow-down Down
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Will rates rise, fall or remain relatively unchanged? Experts and Bankrate analysts provide their insights.

This week (Jan. 29 – Feb. 4) the experts say: Mortgage rates might move even lower.

This week, a little more than half of the panelists believe mortgage rates will fall over the next 35 to 45 days. Just 9 percent think rates will rise, and the rest believe rates will remain relatively unchanged (plus or minus 2 basis points). Percentages reflect all votes, and not the subset of voters who write comments.

Experts’ comments and Bankrate analysts
Experts’ comments Panel
The bond market seems to have settled down a bit for the time being, with 30 year fixed rates hanging out right around 5 percent. Poor earnings reports and continued lack of consumer confidence will keep rates low for some time, as they continue to bounce around in a very narrow range. All eyes will be on the Fed this week to see what direction short term rates will take. Remember, Fed rate movement does not translate directly to mortgage interest rate movement. Rates could potentially go lower, but as a very lean staffed lending industry attempts to cope with a massive influx of business, there is not really any incentive for them to move any lower.
David Kuiper, mortgage planner, First Place Bank, Holland, Mich.
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Rates to borrowers clearly have a ceiling in this market. As expected, just as the debt issues have driven yield higher over the past week, speculation that the Fed will step in and start buying Treasuries again has driven yields lower. The most important element of the next few days is the mix of tax cuts or spending programs that will be enacted by President Obama. Both have different implications for borrower interest rates. But, don’t be fooled. A fiscal stimulus of spending may not be the most efficient manner of improving consumer sentiment, as opposed to a tax cut that may be felt sooner.
Cameron Findlay, chief economist, LendingTree.com, Charlotte, N.C.
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The Fed completed their meeting today and indicated that although they cannot lower their rates they can do things to assist the market. They indicated they will go into the open market to purchase Treasury bills to keep rates low. This is what the market was waiting for an desperately needed to hear. Early next week should be a great time to lock those loans.
Mitch Ohlbaum, President, Legend Mortgage, Los Angeles
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A pattern seems to be developing that the Fed buys mortgages through Fannie Mae and Freddie Mac at the beginning of the month. We’ve seen rates dip substantially at the beginning of December and the beginning of January. Be ready to lock in early next week. We will not see rates under the 4 percent range. Be happy with what the government is doing for you with this program.
Jeff Lazerson, president, Mortgage Grader, Laguna Niguel, Calif.
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Many banks artificially inflated interest rates to absorb a rush of applications over the last few weeks. Economic fundamentals continue to show weakness, which is good for rates. As lenders move their existing applications to closing, increasing their capacity, rates from the lenders should come back down.
Jim Sahnger, mortgage consultant, Palm Beach Financial Network, Stuart, Fla.
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Market forces toward higher rates are countered by open-market buying from the Fed.
Dan Green, Mobium Mortgage, author of TheMortgageReports.com, Cincinnati
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My view is that conforming and FHA rates will depend almost exclusively on what the Federal Reserve does. One significant factor to watch is this: before the Fed started pumping money into mortgage paper, they supported the commercial paper market. This is the first week during which that commercial paper is coming due and if those borrowers can find sources other than the Fed we may see more money flow to mortgage paper and rates will drop.
Dick Lepre, senior loan officer, Residential Pacific Mortgage, San Francisco
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Bankrate’s analysts Panel
Although concerns about printing money and eventual inflation have tugged rates higher, worries about the banking sector and the possibility of even more Fed intervention in credit markets will lead to slightly lower rates.
Greg McBride, CFA, senior financial analyst, Bankrate.com
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When politicians manipulate mortgage rates, are rates more or less predictable than when market forces determine them?
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.