Expert Poll: Mortgage Rate Trend Predictions For June 24-30, 2021
Experts say rates will ...
Stay the same
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Mortgage experts mostly expect rates remain the same in the week ahead (June 24-30). In response to Bankrate's weekly poll, 67 percent said rates will go nowhere while 22 percent said rates will go down and just 11 percent said they will rise. Calculate your monthly payment using Bankrate's mortgage calculator.
Rate trend index
Experts predict where mortgage rates are headed
Week of Jun 17 - 23
Experts say rates will ...
Stay the same
Flat. Waiting for the markets to make up their minds.
Long-term mortgage rates will move up in the coming week. Historically, the spread between 30-year fixed rate mortgages and 10-year Treasurys has been between 1.7 percent and 1.9 percent. In light of last week’s Fed announcement, the market clearly believes that things are returning to normal and the recent spread of roughly 1.3 percent between 30-year fixed rates and 10-year Treasurys will no longer hold. Thus, last week we saw both a drop in Treasury yields and an increase in 30-year fixed mortgage rates. This should happen again.
Lower. Such a great battle in the bond market over the last week. After the Fed day 10-year yield rise of roughly 1.58 percent, we got as low as 1.36 percent by Sunday evening and currently at 1.49 percent. A lot of action because the market doesn't know what to do here. It clearly doesn't want to go higher no matter how good the economic data is or how hot inflation data is. We simply haven't enough stock correction of 10 percent or higher to drive bond yields much lower. In reality, we are overdue for a bond market rally and a stock correction, and neither has happened in 2021. But the next noticeable move should be lower in bond yields.
Trend: Flat. There are two opposing forces: fear of inflation tends to drive rates up. Uncertainty over jobs, GDP, and the economy drives money to the safety of fixed income securities sending rates down. These are offsetting at present keeping rates flat.
Mortgage rates go nowhere. Here's a parody based on a song from the 1961 Elvis hit, “Can't Help Falling in Love.” "Wise men say; Only fools rush in; But bonds can't help falling apart again." So take your summer vacation now. The 10-year Treasury note will join you with yields staying between 1.34 and 1.53 percent.
Unchanged. Markets have settled in after dealing with inflation fears early in the month. Look for rates to remain stable over the next week. Inflation fears aside, home prices are on fire whether you look at median or average home prices. Median home prices clocked in at $350,000 this month, up 24 percent YOY. Questions regarding affordability abound but perspective is also needed. Let’s back up three years. Median home prices were $265,000 and the average 30 year fixed rate mortgage was 4.66 percent. Assuming a 20 percent down payment for both then and now, the difference in a mortgage payment based on principal and interest is $75 or 6.8 percent higher. So, while MHP have increased 32 percent in three years, the same can’t be said for “affordability.” Average weekly earnings, as reported by the BLS, increased 13.6 percent from May 2018 to May 2021. Granted, other variables come into play but you simply can’t “discount” the impact of low rates. Taking both income and mortgage payments based on the scenarios listed, one could argue that housing is not less affordable on a monthly basis.
In a surprising move the yield on the 10 -year Treasury, a benchmark for mortgage rates, dropped a good bit after the conclusion of last week’s Fed Meeting. This despite the Fed talking about raising short term rates sooner and tapering their purchases of Treasurys and mortgage-backed securities. Most expected the selloff in bonds to continue and mortgage rates to move higher. I think markets are concerned about the economy after much of the fiscal stimulus wanes in a few months and agree that current inflation is transitory. However, given the rally in rates over the last couple days, I don’t think they will rally much further. Rates will be flat in the coming week.
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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