Mortgage Rate Predictions For The Next 30 Days (January 14, 2010)

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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 or jumbo mortgages. Nor is the survey specific to Cincinnati or Chicago.

for a real-time rate quote.

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

• 36% predict mortgage rates will increase
• 18% predict mortgage rates will decrease
• 46% predict mortgage rates will remain unchanged

I expect mortgage rates to remain unchanged.

My advice not be appropriate for your individual situation and I'm not always right. Ultimately, you may find your time better spent on learning that George Washington invented instant coffee than reading my analysis.

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

"Markets move into wait-and-see mode on the economy and the Fed. "

It's been a wild few weeks in the mortgage markets.  December was a shoot-out that left every "floater" dead. Since the New Year, though, markets have been easing and rates have been falling.

Today, mortgage rates are at their best levels of the year.

In an it-won't-sound-so-strange-once-you-understand-how-mortgage-rates-work kind of way, rates are down for the same reason they were up -- expectations on the economy.

See, when December started, the jobs report showed net job growth very close to flat.  Wall Street got very excited about it. Plus, housing showed more growth and Retail Sales punched in way bigger than projections.

At the same time, members of the Fed were stumping for a raise in the Fed Funds Rate and a need to be wary of runaway growth.  This, too, got Wall Street excited and as of December 31, 2009, the economy hinted at recovering and expanding at ludicrous speed.

Because of this, mortgage rates made their biggest 1-month jump of the year in December. Since then, however, it's been a mixed bag.

January's job report and retail sales report both went negative, and Pending Home Sales failed to impress.  Furthermore, there's been a general softness about the economy and Fed members have gone silent on Fed Funds Rate matters.

It's a reversal from December and expectations for 2010 are dialed back a bit. Mortgage rates are falling, but have likely bottomed out for now.

We're witnessing a stasis. The economic forces of expansion and contraction seem balanced.  Data is contradictory and difficult to interpret.  Wall Street is unsure of what's next.

Mortgage rates should stay in a tight range between now and the Super Bowl.  There will be days when rates are down, and days when rates are up. The key is picking the right day to make your rate lock.

Be patient, but not too patient. Locking mortgages has always been a game of timing.  And for that, you may need some help.

If you don't have a loan officer you can call up for advice, know that you can always call me. Or,, whichever is easier. I handle all of my own email and I would happy to help you lock your mortgage rate.

My bank has good, low rates. Just ask me about it.