Bankrate.com Mortgage Trend Index (January 8, 2009)

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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, or jumbo mortgages.  For rate quotes,.

Here are the group's 30-day mortgage rate predictions:

• 33% of participants predict rates will increase
• 42% of participants predict rates will decrease
• 25% of participants predict rates will remain unchanged

I am predicting that rates will increase over the next 30 days, but my prediction may not be appropriate for your individual situation.  And it may be wrong, too.

Here's what I told Bankrate.com:

"Despite the Fed's best efforts, Fannie Mae roadblocks with new, higher fees."

Now, the analysis may seem a little backwards because this is a rate survey and not a fee survey.  However, rates and fees are inter-connected.  Mortgage applicants can almost always exchange their closing costs for a higher mortgage rate and given the size of Fannie Mae's LLPAs, most Americans will have to.

Mortgage rates may be falling, we're starting to see, but rates are now just a starting point.  After factoring in the fixed-costs of a conforming mortgage, rates aren't really down at all.  In fact, they're up.

There is a twist, though.  Fannie Mae's new fees have not made their way to lender rate sheets.  It could happen tomorrow, it could happen next week.  Either way, it's coming.  For now, though, mortgage rates are still unaffected. 

Get the good rates while you can.

In the meanwhile, I post mid-day mortgage rates updates on my Twitter feed. Follow me at http://www.twitter.com/mortgagereports and join the conversation anytime.