What Mortgage Rates Will Do Over The Next 30 Days (February 26, 2009 Edition)

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I am a regular participant in the Bankrate.com Mortgage Rate Trend survey and this week's survey is now available.

The Bankrate.com survey is for conforming mortgages.  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:

• 20% predict mortgage rates will increase
• 20% predict mortgage rates will decrease
• 60% predict mortgage rates will remain unchanged

I am predicting that rates will remain unchanged over the next 30 days. My prediction may not be appropriate for your individual situation and it may be wrong, too.

Here's what I told Bankrate.com:

"The yo-yo action continues. Up and down, always returning to the starting position."

Mortgage markets have been a veritable mess lately.  Rates want to move up, the government wants them to move down.  It's reduced us to ia Mortgage Rate Tug-o-War between economic fundamentals and political rhetoric.

The hardest part for rate shoppers is that -- on any given day -- the answer to "who's winning?" can flip-flop 3 or 4 times.  Mortgage rates in the morning can be different from mortgage rates at noon, can be different from mortgage rates at close.

When you're buying a home, it's a harrowing experience. Think about it. Your household budget for the next however-many years is about to be tied to something completely out of your control and completely unpredictable.

If you're refinancing, though, there's a plus-side to the action. 

Because conforming mortgage rates keep returning to this same low-5 percent range, if today's pricing is too high for you, there's a common sense reason to just wait-and-monitor.  If the pattern holds, you'll get your low rate soon enough. Along the same lines, a sub-5 percent rate is now instantly recognizable as a "deal".

When you see it,  consider locking.  

One thing we know about this tug-o-war match is that it can't last forever. Neither side will tire, but one will likely cut it losses and "let go", Revenge-of-the-Nerds-style. My guess is that it'll be the government and when that happens, mortgage rates will soar.  Conversely, if the traders let go, rates will dip.

In the meanwhile, get my Twitter feed for running commentary on mortgage rates, markets, and the like. If you're watching it, you're more likely to get the good mortgage rates before they go bad. 

Follow me at http://www.twitter.com/mortgagereports. Join the conversation anytime.