The Mortgage Rate Prediction For The Next 7 Days (April 15, 2010)

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Need a mortgage rate prediction? I am a regular participant in the Bankrate.com Mortgage Rate survey and this week's results may help you time a rate lock.

Fannie Mae And Freddie Mac Mortgage Rates Only

By way of disclosure, the Bankrate.com survey is for conventional, conforming mortgages only. It does not apply to FHA mortgages nor is the survey specific to South Carolina or Virginia mortgage rates. Furthermore, unique property types including non-warrantable condos and condotels may be excluded.

for a real-time rate quote.

Breaking Down The Predictions

Here's the group's mortgage rates predictions:

• 39% predict mortgage rates will increase
• 22% predict mortgage rates will decrease
• 39% 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 with D'Andre Cole than reading my analysis.

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

"As safe haven buying recedes, mortgage rates advance."

I hope you took advantage of the low rates last week because it'll be the last time we go sub-5 percent maybe ever.

Last Week, Why Did Rates Fall So Much?

Recent gains in the mortgage market are a direct result of something called "safe haven buying". It's market jargon and it's used to describe a trading pattern that tends to emerge during times of uncertainty.

Safe haven buying is characterized by large numbers of investors moving money away from risky investments and toward safer ones.  It's a logical response to surprise events.

Rather than doubling down on their bets in play, traders take their chips off the risk table until the future gets less murky and that's a big reason of why rates fell last week. Greece has yet to show it can meet its debt obligations and there's concern that a default could bring down the broader European Union.

As far as investor risks go, this is a big one.

Why You Should Count On A Turnaround

This past Tuesday, Greece held a successful debt auction. Investors clamored for short-term securities as leaders in the EU pledged support to the nation.

Demand outweighed supply by a multiple of 7.67.  That's huge.  It shows that markets are confident in Greece's ability to recover and it's no coincidence that Tuesday marked the week's low point for U.S. mortgage rates.

Investors are unwinding their safe haven trades, dumping excess mortgage bonds into the open market, pressuring mortgage rates to move higher.

Get ahead of the rate changes because MRV -- Mortgage Rate Velocity -- is as high as its been in a year.

Rate hikes are coming this week and they're going to hit hard.

Float or Lock? Get Your Strategy In Place

Mortgage markets are no longer favorable. Safe haven patterns have receded and there's little to keep mortgage rates low.  The economy continues to show incremental improvement and the stock market is racing past 11,000.

Don't get caught watching the paint dry.

You may have gotten off easy by floating your rate up until now, but it's time to move into locking position.  If you haven't given a loan application to your loan officer, do it ASAP. The longer you wait, the more this next loan is going to cost you.

However, being "alert" is only one part of being ready. You must also have a loan application on file with your lender.

Applications-by-phone are a 4-minute process.  To give one, call my office at 513-443-2020 or. And be sure to give applications to other loan officers, too.  Don't worry -- your credit score won't be damaged if you do it the right way.

Then, once you're done shopping, you can lock on the spot without fear of rates going nuts on you. MRV is extremely high right now. Change happens in a flash.