Each week, Bankrate surveys experts in the mortgage field to see where they believe mortgage interest rates are headed.
This week (Feb. 14-20), 56 percent of the panelists believe mortgage rates will rise over the next week or so; 13 percent think rates will fall; and 31 percent believe rates will remain relatively unchanged (plus or minus 2 basis points).
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Read the comments and rate predictions of mortgage experts and Bankrate analysts below.
Robert A. Brusca
Fact and Opinion Economics, New York
Rates will be higher.
Mortgage loan officer,
Grande Financial, Maumee, Ohio
Rates will move up slightly.
Certified mortgage planning specialist and branch manager,
Academy Mortgage, Yuma, Arizona
With the stock market rocketing back to record levels, look for mortgage rates to continue to drift higher. Expect interest rates to start with a “5” by summer.
Greg McBride, CFA
Senior vice president and chief financial analyst, Bankrate.com
Inflation fears have surfaced again, and the Fed does not seem likely to let market volatility get in the way of raising rates in March.
, Branch manager, Alterra Home Loans, Silverdale, Washington
This week will see several data points, including the MBA’s survey of last week’s applications, the Consumer Price Index (CPI), Retail Sales, the Producer Price Index (PPI), Jobless Claims, Empire Manufacturing, Philly Fed survey, Industrial Production and Capacity Utilization, and the NAHB Housing Market Index. The 10-Year Treasury yield rose to a four-year high Monday as concerns over inflation continued and rates crept higher, again. The 10-year went up to 2.88 percent, but then dropped to 2.85 percent with 30-year MBS prices showing slight improvement. I’m projecting that the small drop in the 10-year was just a breather, and rates will edge slightly higher.
President and Chief Economist, Naroff Economics, Holland, Pennsylvania
Rates will move up.
Movement Mortgage, Dallas
Sparks may be going off this Valentine’s week, but they’re not alone; inflation is heating up as well. With the hotter-than-expected inflation data, I expect mortgage rates to continue to rise. As I’ve mentioned before, inflation is the arch enemy of bonds. The strong inflation numbers also give rise to rate hike fears. Expect more of the same as the economy continues to improve.
Arcus Lending, San Jose, California
According to industry reports, the 30-year-fixed is now at a four-year high while the 15-year fixed touched a seven-year high. If that wasn’t bad enough, readings for January Consumer Price Index (CPI), a key inflation data, came out much higher than expected. This further solidifies the expectation of higher inflation this year. Higher inflation typically causes Fed to increase the funds rate. It also has an adverse impact on the pricing of bonds. All this creates a perfect storm for mortgage rates to rise higher not just this week but for several months to come.
Nancy Vanden Houton, CFA
Senior research analyst,
Stone & McCarthy Research Associates, New York
Rates will be higher.
Branch manager, Sierra Pacific Mortgage, White Marsh, Maryland
Today’s CPI, or consumer price index number, showed higher-than-expected inflation. This caused an immediate reaction in the bond market with yields and mortgage rates increasing. However, retail sales disappointed, indicating the consumer may be tapped out. With the price of oil dropping lately, I think that inflation will slow in the coming weeks. Once the market sees inflation slowing and the consumer weaker than expected, I think we will see a rally in interest rates. I expect lower rates in the coming week.
Senior vice president of LoanLogics, Trevose, Pennsylvania
Here’s a song parody of a 1967 hit. “Sunday will never be the same. Bonds made a bottom-start; It must be back again.” Rates dropped Sunday after testing key levels. Global equity markets present ugly technical pictures worldwide. Some say they are “mere corrections,” as the pros head for the exits. Provided the dollar remains stable to strong, expect lower rates soon.
Founding director and executive-in-residence of the O’Neil Center for Global Markets & Freedom SMU Cox School of Business & former chief economist, Dallas Federal Reserve Bank, Dallas
Northpointe Bank, Holland, Michigan
Wow! What a roller-coaster ride mortgage interest rates have been on. Volatility has returned to the markets. After years (literally!) of market complacency, hints of inflation in the economy, tax cuts, a roaring employment market and rising (mostly) stock market have the bond market, where interest rates are priced, a less attractive investment alternative, and as such mortgage interest rates have been on a steady climb. With that being said, in a historical context, interest rates are still very attractive.
Senior loan officer,
RPM Mortgage, San Francisco
We should see bullish (higher prices, lower yields) technicals at the end of this week. For now, I’m going with flat. Understand that my tech calls are based on 30-year Treasury futures, and what we have been seeing is a changing shape to the yield curve making the usual nexus between the 30-year and 10-year much less meaningful.
Senior loan officer, AMC Lending Group, Irvine, California
A lot back and forth action on the yield between 2.88 and 2.82 percent on the 10-year yield. Inflation came in a tad hotter than expected, but core inflation still running at 1.82 percent year over year, so not much happening there yet. If rent inflation starts to grow again, core CPI inflation will easily get above 2 percent, and that is a big factor on the 10-year yield breaking over 3 percent. Still, it has been hard for the 10-year to break over 2.92 percent, a key level for me even with all the action recently.
Americana Mortgage Group, Manhasset, New York
Rates are stable.
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.