In the week ahead (Feb. 27-March 4), 10 percent of the experts predict rates will rise, 60 percent say rates will fall, and 30 percent predict rates will remain relatively unchanged (plus or minus 2 basis points). Calculate your monthly payment using Bankrate’s mortgage calculator.

10% say rates will go up

Les Parker

Les Parker

Managing director, Transformational Mortgage Solutions, Jacksonville, Fla.

Mortgage rates will go up. Here’s a parody based on The Carpenters’ hit, “Rainy Days and Mondays.” “Virus days and Mondays always get stocks down.” Coronavirus is everywhere. The fall of equities feeds on itself. When it stops, rates will rise rapidly.

60% say rates will go down

Natalie Campisi

Natalie Campisi

Senior mortgage reporter, Bankrate.com

The spread between the 10-year Treasury and mortgage rates is wider than expected, so if coronavirus fears persist we might see a narrowing of this gap, which will drive rates lower.

Dick Lepre

Dick Lepre

Senior loan adviser, RPM Mortgage, Alamo, Calif.

COVID-19 has not yet caused a significant number of deaths but, being centered in China, it has disrupted the manufacturing supply chain. No one believes the data released by China’s government and the uncertainty created thereby has caused equity selling a flight-to-quality buying of Treasuries, which has sent the 10-year yield to its lowest ever. Mortgage-backed securities yields have not dropped as much. Before this happened many nations were already in a modest recession. Look for Treasury yields to stay low for a while until there is a belief that the consequences of COVID-19 are known.

Greg McBride

Greg McBride, CFA

Senior vice president and chief financial analyst, Bankrate.com

The coronavirus headlines have gotten worse and confidence has been rattled, pushing bond yields to new lows. Mortgage rates are down, and won’t turn back up until investors feel the spread has slowed and containment efforts are working. We’re not there yet.

Logan Mohtashami

Logan Mohtashami

Senior loan officer, AMC Lending Group, Irvine, California

In chaos theory, the butterfly effect refers to the idea that, due to the interconnectedness of all things, a small event can result in a large effect on a nonlinear, dynamic system. The entire conversation is now about coronavirus and what the headlines are going to be. Right now we are basically at a triple cycle low in the 10-year yield which, on Tuesday, hit an all-time low intraday. If we were going to get a short-term bounce higher in yields this is where it would be. If the coronavirus headlines get worse and more and more countries and cities have to take aggressive action including us in America. The 10-year yield will be below 1 percent and we will be talking about a 2 handle on mortgage rates. None of the recent better economic data matters, it’s all about the  coronavirus headlines as future data will come in soft for some sectors.

Bob Moulton

Bob Moulton

President, Americana Mortgage Group, Manhasset, New York

Rates will drop a bit.

Mitch Ohlbaum

Mitch Ohlbaum

President, Macoy Capital Partners, Los Angeles

Rates will go down. The 10-year Treasury broke the record yesterday and bottomed out at 1.31 percent, breaking the previous record low 1.325 percent set in 2016. Just 11 days ago they were trading at 1.61 percent, which means there is fear in the market. The flood into treasuries is not anything new, it is the safest and most liquid asset in the world today and where everyone wants to park money in times of distress or the unknown. This is, of course, the simple law of supply and demand and drives rates down. The selloff in equity markets moves people to treasuries, the fear of global recession moves people to treasuries, the fear of COVID-19 moves people to treasuries. History has shown that big “emotional” movements in the market rebound quickly until there is concrete economic news.

30% say rates will remain the same

Michael Becker

Michael Becker

Branch manager, Sierra Pacific Mortgage, White Marsh, Maryland

In my vote last week, I mentioned the divergence in outlook on the global economy based on the spread of the coronavirus that the bond markets and equity markets had. Bonds seemed unsure that the economic damage caused by the outbreak would be limited, whereas the equity markets traded as if there will be little to no disruption in the global economy. As the virus has spread into more nations, equity markets took notice and sold off drastically, while the bond rally intensified. In fact, the 10-year Treasury hit an all-time low yield. Mortgage rates rallied, as well, although they are still a little away from their all-time lows. People expecting mortgage rates to be at all-time lows based on Treasury yields forget that when mortgage rates were at all-time lows the Federal Reserve was buying billions of mortgage-backed securities every month. Without that, it’s hard to see rates dropping to all-time lows. Over the next week, I expect the coronavirus story to remain in focus, but rates will not rally anymore and will be flat.

Joel Naroff

Joel Naroff

President and Chief Economist, Naroff Economics, Holland, Pennsylvania

Rates are going to be flat. It’s hard to see rates rising with the coronavirus scare but hard to see how much lower they can get.

Shashank Shekhar

Shashank Shekhar

CEO, Arcus Lending, San Jose, California

Rates will remain the same. The reaction to the spread of coronavirus from the stock markets has been swift and steep in the last couple of days. The bond markets, which have a direct impact on mortgage rates, are still trying to guess just how bad the outcome for the global market will be. With one or two Fed rate cuts and fear of the worst-case scenario for the economy already built in the pricing, I think the only way for the mortgage rates is up from here. This week could be stable for mortgage rates but eventually, we will see them going up, ever so slightly.

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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