Mortgage Rate Predictions For The Next 30 Days (November 25, 2009)

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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, or 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:

• 80% predict mortgage rates will increase
• 10% predict mortgage rates will decrease
• 10% predict mortgage rates will remain unchanged

I expect mortgage rates to decrease.

My advice not be appropriate for your individual situation and I'm not always right. Ultimately, you may find your time better spent watching Neil Young sing the theme song to The Fresh Prince of Bel Air than reading my analysis.

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

"Mortgage rates, like everything else, are cheap this holiday season."

The U.S. economy is driven by consumer spending.  Spending is the catalyst for all things good.  Without spending, the economy idles and, right now, spending is flat.  Sure, the housing market is improving and so are the banks, but an economic recovery won't be proclaimed until everyday Americans start spending cash.

Consumer spending is down and trending lower. Retailers know it, too.

Tight purse strings explain why "Black Friday" specials started a full week early at Amazon, and why stores are discounting more than usual this year.  Anything to part a person from his paycheck.

Despite the deals and promos, however, consumers will spend less this season. Joblessness is high and shoppers are cautious. The lack of register receipts will hold the economy in place, which is to say that growth will remain tempered.

For mortgage rate shoppers, this is a good thing.

See, ever since Fed Chairman Bernanke's March 2009 interview with 60 Minutes, the one in which he metaphorically observed "green shoots" in the economy, Wall Street has been betting on recovery.  First, they thought it would come in summer.  Then, in fall.

Now, expectations are delayed again.

So long as our nation's economic future is in doubt, mortgage markets will benefit from safe haven buying. More demand means lower rates, and, by extension, cheaper home financing.

A year ago Thanksgiving, mortgage rates reached an all-time low.  We're approaching those same all-time levels again.  But unlike last year, rates should stay low for longer than an hour or two.

Mortgage rates will remain beat down until consumer spending returns.

My advice to homeowners?  Talk to your loan officer about a refinance. Don't worry about your equity, your job, your closing costs, or anything else for that matter -- just make the phone call and evaluate your options. You can always say "no".

Based on today's rates, though, I have a sneaking suspicion you'll want to say "yes".

If you don't have a loan officer and/or don't want to call your current lender's toll-free support center, justwith some notes on your home loan and I'll bounce back with some answers for you.

I handle my emails personally and my rates are excellent.