Expert Poll: Mortgage Rate Trend Predictions For Dec. 2-8, 2021
Experts say rates will ...
Stay the same
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Mortgage experts are split over where rates are headed in the coming week (Dec. 2-8). In response to Bankrate's weekly poll, 44 percent said rates will go down. Meanwhile, 33 percent said they would hold steady and 22 percent predicted they would rise. Calculate your monthly payment using Bankrate's mortgage calculator.
Rate trend index
Experts predict where mortgage rates are headed
Week of Dec 2 - 8
Experts say rates will ...
Stay the same
Uncertainty over the impact of the omicron variant and the potential for rising inflation is driving a lot of money to safe haven investments
Up. Even Fed chairman Powell is ditching the word “transitory” from inflation.
Sales manager,Mortgage300 Corporation,Dallas, TX
Rates will be higher. The brief bond rally, sparked by omicron concerns, was halted by Fed chair Powell’s comments this week regarding inflation and tapering. The risks of higher inflation have moved higher according to Powell, and the word “transitory” was retired. The jobs report comes this Friday. Early indications suggest that it could be strong. Combined, a strong jobs report with higher inflation reinforces the trend of higher rates.
Uncertainty over the impact of the omicron variant and the potential for rising inflation is driving a lot of money to safe haven investments – mortgage bonds, 10-year Treasury notes, etc. This flight to safety is driving up the price of these securities and pushing down their yields. Long-term mortgage rates will fall in the coming week.
Trend: Lower. Markets are reacting more to COVID/omicron fears than anything else. Fed chairman Powell stated that inflation would persist well into 2022 but the Moderna CEO expressed concerns about current vaccines against the omicron variant. Unless fear abates we will see money move to the safety of Treasury and MBS debt.
Lower. Wow, what a crazy few days with bond yields. We had a 27 point move in the 10-year yield once the news on omicron came out. Currently, the 10-year yield is at 1.46 percent. We know now that we have tried to break above 1.75 percent twice, which has failed. We tried to close above 1.64 percent twice, and that has failed. With a new variable in omicron, we have to add that the Fed is still on track to raise rates and cool the economy down. This has a good set up long term for yields to fall. However, for now, keep an eye on 1.40 percent and 1.64 percent, especially the 1.40 percent level.
With renewed concerns about COVID variants and the risk of Fed rate hikes dissipating, rates should stay relatively unchanged. I would expect a narrow trading range through the end of the year but proceed with caution as inflation news will drive the direction near term.
Mortgage rates go nowhere. Here's a parody based on the Rolling Stones 1967 song "She's A Rainbow" used in the Disney hit movie “Cruella.” "Flu comes in colors ev'rywhere; Stocks drop unfair; Bonds like a rainbow." omicron is one of many variants. Odds favor lower rates of deaths and hospitalizations, which is the normal degeneration of viruses. So do not be surprised with an unwinding of much of the recent price action. As a result, expect a near-term stalemate between the bulls and bears.
Nancy Vanden Houton, CFA
CFA, Senior Research Analyst,Stone & McCarthy Research Associates,New York, NY
About the Bankrate.com Rate Trend Index
Bankrate's panel of experts is comprised of economists, mortgage bankers, mortgage brokers and other industry experts who provide residential first mortgages to consumers. Results from Bankrate.com’s Mortgage Rate Trend Index are released each Thursday.
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