A Mortgage Rate Prediction For The Next 7 Days (October 14, 2010)

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Looking to lock a mortgage rate this week? Wondering if you should float your rate instead? I'm a contributor to the Bankrate.com Mortgage Rate Trend Index and this week's survey should give you guidance.

Conforming Mortgage Rate Predictions Only

First, the fine print. These mortgage rate predictions are for Fannie Mae and Freddie Mae mortgages in Cincinnati, Ohio; Potomac, Maryland; and everywhere else.

FHA streamline refinances are not covered because FHA mortgage rates are based on the price of GNMA securities. Furthermore, unique property types including non-warrantable condos in Chicago, condotels in Florida, and loans for investors with 5 to 10 properties financed are excluded.

for a real-time rate quote.

Breaking Down The Predictions

Here's the mortgage rate outlook for the upcoming week:

• 29% think mortgage rates will increase
• 12% think mortgage rates will decrease
• 59% think mortgage rates will won't change

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 playing this video I couldn't quite work into my MLS Techfair presentation this week.

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

"The trend is your friend. Mortgage rates should go lower."

I am one of two survey participants calling for a drop in rates this week so heads-up.

The Long-Term Trend Of Falling Rates

Looking back to mid-April, mortgage rates have been falling. It's been a gradual shift. So gradual, in fact, that most people weren't even aware that a Refi Boom had started until it was 10 weeks old.

Between April and early-July, mortgage rates cut new lows nearly weekly. Then, after a brief pause, the slide continued. Today, rates are 1 percent lower as compared to April.

It's an important side-note because we have to keep sight of why rates fell.

Between April and July:

• The economy was failing to add jobs
• The housing market was limping along, on the whole
• World economies were at risk of sovereign debt default

And, since then, nothing has changed, fundamentally. We're still facing the same issues and questions marks as from April and that was 6 months ago.

It's no wonder this Refi Boom won't end.

Think of it like physics -- an object in motion tends to stay in motion unless acted upon by outside force. And, right now, there's no outside force to act on mortgage rates. Until there is, rates should continue to slide.

Rates May Drop, But It's Time To Lock-In Anyway

Mortgage rates are really, really low. Take the bird-in-hand. Get started on that refi.

To give an application and get locked, call my office at 513-443-2020. It'll be 4-minute call and I'll get a guaranteed interest rate in your hand within an hour. Or, if email is more your thing,and we can get started that way instead.

Either way, it's time to make a move..