What Mortgage Rates Will Do Over The Next 30 Days (July 16, 2009 Edition)

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Are mortgage rates going up? Are mortgage rates going down? I am a regular participant in the Bankrate.com Mortgage Rate Trend survey and this week's survey may point you in the right direction.

The Bankrate.com survey is for conforming mortgages only. It does not apply to FHA mortgages, VA mortgages, jumbo mortgages, or foreign national mortgages. For rate quotes,.

The group's 30-day prediction for mortgage rates:

• 50% predict mortgage rates will increase
• 25% predict mortgage rates will decrease
• 25% predict mortgage rates will remain unchanged

I predict that rates will increase over the next 30 days.

Unfortunately, this week's survey is a few days too late to do anyone much good.  Since Monday, rates have been on a rocket-ride to the moon.  But besides, it's not like my prediction for the next 30 days ahead is going to necessarily fit your particular situation.

Here's what I told Bankrate.com:

"Risk-taking is back in vogue. Stock market up, mortgage rates up."

Okay, a couple of things are happening in markets right now and none of them are good for mortgage rates.  If we use our 20/20 Hindsight Glasses, we probably could have seen it coming.

1. Home prices are no longer on a steep decline
2. Consumer Confidence is rising
3. The financial system is returning to profitability

Furthermore, Americans no longer have Recession on the Brain like they did last September and October.  Back then, the financial crisis was the leading story of every news-related show on TV and in print.

The notable absence of these The End Of The World As We Know It-like messages may be one reason why consumer purse strings are starting to loosen.  For the fourth straight month in May, Retail Sales figures were hotter-than-expected.

Consumer spending accounts for the majority of the economy's activity and, now that spending is up, Wall Street is betting that businesses will prosper.  The Dow Jones is up 5 percent since Monday.

It shouldn't surprise you, but mortgage rates have tanked over the same period of time.

In 2008, mortgage rates benefited from the stock markets' losses.  Investors fled risk and parked their dollars in the relative safe haven of the mortgage-backed bond market.  Now, in 2009, as the stock market improves, some of those safe haven trades are getting unwound.

Over the next few weeks, at least, gains in the stock market should come at the expense of mortgage rates.

Remember, though, mortgage rates move quickly.  If you're not already working with a loan officer and know you'll want a new mortgage soon, you should consider being a part of my Rate Watch program.

Call orand I'll take a full loan application from you to keep on file and queued up. I'll ask you to pick a "target rate" and then, when I see it available on the rate sheets, I'll submit and commit it for you. We then start working toward your closing.

Or, if you prefer watching rates from the sidelines, my Twitter timeline is http://twitter.com/mortgagereports. I post several mortgage updates each day.