Mortgage Rate Trend Index: June 19, 2019

Les Parker

Senior vice president of LoanLogics, Trevose, Pennsylvania

Mortgage rates will go up. Here’s a parody based on “The Times They Are A-Changin,” by Bob Dylan: “Ten year’s drenched to the bone. If good yield for it; Is worth savin’; Then you better start sellin’; Or you’ll sink like a stone; For the times they are a-changin.’” The European Central Bank is getting looser and the Fed is staying pat. Rates can go much lower, but for now they will back up.

53% say rates will go down

Michael Becker

Branch manager, Sierra Pacific Mortgage, White Marsh, Maryland

At the conclusion of their June meeting, the Federal Reserve did not disappoint markets that were expecting a dovish statement. The Fed hinted at a July cut, dropped their “patient” on rates statement and added that “uncertainties” around its outlook have increased. This was a key statement and markets took it as a sign the Fed will cut rates in either July or September with one more cut in 2019 and a third in 2020. Bonds are rallying on this news and mortgage rates are improving. Unless we get some improvement in trade negotiations with China, I expect mortgage rates to improve next week.

Robert A. Brusca

Chief economist, Fact and Opinion Economics, New York

Lower, lower, lower rates next week.

Michael Cox

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

Rates will move down slightly next week.

Michelle Dugan

Mortgage broker, MS Lending, LLC, Ridgeland, Mississippi

As expected, the statement from the Fed meeting strongly suggested that we will see a decrease in rates next month. This news was friendly to mortgage bonds. I believe we will continue to see a downward trend in mortgage rates over the next week.

Dick Lepre

Senior loan officer, RPM Mortgage, San Francisco

Rates will trend downward next week. The technical bull market was unaffected by the Federal Open Market Committee (FOMC) statement on June 19. We will soon see the 10-year Treasury lower than 2 percent, with a technical forecast of 1.8 percent still in place. There are three things the FOMC looks at in order to determine policy: GDP, jobs and CPI. With the first quarter GDP at 3.07 percent and the most recent estimate from the Atlanta Fed at 2.0 percent, the Fed did not feel compelled to lower. The May jobs report from the BLS was weak, but the Fed would need to see successive weak jobs to feel compelled. The Fed wants CPI close to 2.0 percent. Most recent data showed overall CPI at 1.8 percent and core at 2.0 percent. No compulsion there.

Bob Moulton

President,
Americana Mortgage Group, Manhasset, New York

Rates are stable.

33% say rates will remain unchanged

Derek Egeberg

Certified mortgage planning specialist and branch manager,
Academy Mortgage, Yuma, Arizona

Look for rates to remain stable at these levels.

Nancy Vanden Houten, CFA

Senior economist, Stone and McCarthy Research Associates, New York

Rates will remain unchanged.

Robert Johnson, PhD, CFA, CAIA

Professor of finance, Creighton University, Omaha, Nebraska

Rates will stay the same. While the Fed didn’t cut rates, Chairman Powell indicated that “the case for additional accommodation has strengthened.” While rates will likely be flat in the short-term, the bias is downward over the long-term.

Logan Mohtashami

Senior loan officer, AMC Lending Group, Irvine, California

Rates will stay flat. Last week I talked about the key 2.04 percent level on the 10-year yield being a double bottom test. It looks like we are going to close below that today after the Fed decided not to cut rates but leave a rate cut very open in the future. If we can close below 2.04 percent and get next-day bond buying to follow through action, we have the potential of the 10-year yield getting toward 1.60 percent at some point this year. The key to lower rates, if that level is broken, are a few very important factors, such as: a weaker domestic PMI and global trade data; the stock market selling off thus driving more dollars to bonds; and headlines like the trade war with China, Japan and Europe; debt-ceiling issues; and a hard Brexit can drive panic bond buying.

Jim Sahnger

Mortgage planner, C2 Financial Corporation Jupiter, FL

The Federal Reserve met Wednesday and chatter about the meeting and the Fed was largely about when the next rate move would be and who would be calling for it. President Trump has voiced he believes rates should be lower and that Chairman Powell may no longer be the right person for the job. Powell satisfied the markets with a no-rate-cut decision Wednesday and left the door open to cuts in coming meetings. Markets reacted slightly favorable upon the release, but we’ll need to see meaningful movement from here before we get a major rate move.

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.