Bankrate.com Mortgage Trend Index (November 6, 2008)

• Tweet

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

As a reminder, the Bankrate.com survey is for conforming mortgages only and does not apply to FHA, VA, or jumbo mortgages.  You can email me anytime for a personal rate quote.

Here are the group's predictions for the next 30 days:

• 46% of participants predict rates will increase
• 38% of participants predict rates will decrease
• 16% of participants predict rates will remain unchanged

I am predicting that rates will remain unchanged over the next 30 days, but that doesn't mean you should necessarily follow my advice when choosing whether to lock a rate, or float it.  My advice may not be appropriate for your individual situation.

From the Bankrate.com survey:

"Expectations for economic stimulus spurs demand for mortgage-backed bonds."

With the Democratic Party waiting control of the White House, the House and the Senate, the odds of a second round of economic stimulus just increased dramatically. 

In fact, the talk has already started.  Earlier this year, the Economic Stimulus Act of 2008 put $150 billion in American pocketbooks.  Now the House wants to follow it up with $61 billion more to buffer the economy against recession.

This is how stimulus packages work -- you send money to tax-filing Americans who then take that money and use it for things like Make-It-Yourself clothing or gifts for coffee lovers.  In recirculating dollars in the economy, more businesses get busy, more taxes get paid, and more workers get hired.  Spending is the engine and it's why the government is focused on rate cuts and stimulus. 

It's also why mortgage rates should idle, even as market fundamentals look weak.  The long-term impact of the Democratic Party in control should be to keep pushing the economy forward by force and/or will until it actually happens.

Of course, until things stabilize, the mortgage road will be choppy.  To know what's happening in the mortgage markets now, get near-real time market updates from me @mortgagereports on Twitter.