A Mortgage Rate Prediction For The Next 30 Days (November 12, 2009)

• Tweet

Need a mortgage rate prediction? 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 conventional, conforming mortgages only. It does not apply to FHA mortgages, veterans mortgages, jumbo or super jumbo mortgages. Nor is the survey specific to Cincinnati.

for a real-time rate quote.

Here's the group's 30-day prediction for mortgage rates:

• 46% predict mortgage rates will increase
• 9% predict mortgage rates will decrease
• 45% predict mortgage rates will remain unchanged

I expect mortgage rates to increase.

My advice not be appropriate for your individual situation and I'm not always right. Ultimately, you may find your time better spent watching Post-It Art than reading my analysis.

Either way, here's what I told Bankrate.com:

"Mortgage markets are unnaturally low right now."

From 2006-2008, 30-year fixed rate conventional mortgage rates were pinned in the 6 percent range.  On some days, rates were higher; on some days, rates were lower.  Overall, however, the range held remarkably well.

But then, in September 2008, as the U.S. economy went to DEFCON 1, markets changed. Too-Big-To-Fail banking institutions were failing and Fannie Mae and Freddie Mac went into government conservatorship.

Investors fled the stock market in search of safer returns and mortgage-backed bonds offered that type of security.  Fear on Wall Street played a major role in driving mortgage rates down by a percentage point.

Since November 2008, 30-year fixed mortgage rates have been range-bound at 5. But 5 percent is unnatural given the current economy.  We're not at the same place we were a year ago.  Many of the contributing factors to the near-economic collapse are already in repair.

1. Big banks are capitalized
2. Major insurers are turning profits
3. Housing is showing excellent improvement

And, although unemployment rates are rising, the number of monthly net jobs lost is dropping.  And employment tends to lag recovery anyway.  Wall Street knows this and you should know it, too.  The key indicator from here on forward is economic growth and those "green shoots" Ben Bernanke mentioned in March are just about in bloom.

So, for now, mortgage rates are low. Take advantage.  Low rates won't last.  Soon,  rates will rebound to 6 percent and when it happens, the move will be quick.  You won't have much time to react -- maybe 3 days to a week at most.

To stay ahead of mortgage rate changes, follow my "Float or Lock" advice on Facebook and Twitter. It's free and should help you make better decisions with your rate locks.

And if you find my advice useful,or call me so we can work together. I answer all my own emails and my rates are excellent.