Mortgage Rate Prediction For The Next 7 Days (January 6, 2011)

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Thinking about a refinance? Wondering if rates will rise or fall in the next few days? 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 conforming mortgages in Cincinnati, Ohio; Fairfax, Virginia; and wherever else conforming mortgages are available.

Jumbo mortgages are not part of this survey because jumbos price differently like conforming loans. The same for FHA streamlines. Furthermore, unique property types including non-warrantable condos and loans for investors with more than 4 properties financed are excluded.

for a real-time rate quote.

Breaking Down The Predictions

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

• 50% think mortgage rates will increase
• 19% think mortgage rates will decrease
• 31% 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 watching Josh Groban sing the tweets of Kanye West.

Either way, as I told Bankrate.com : "Eurozone issues resurface, creating a temporary Safe Haven push to bonds. For now, rates fall."

Eurozone Troubles Resurface

Last year, mortgage rates took a historic, 8-month run toward 4 percent. When the 8-month rally started, rates were in the 5s. The rally was triggered by events in the Eurozone.

At the time, the U.S. economy was known to be recovering and rebuilding its foundation. The Federal Reserve was withdrawing support for bond markets and jobs growth was turning positive.

In Greece, however, the economy was faring much worse. Investors worried that Greece may default on its national debt. Then, those concerns spread to other corners of the Eurozone; to other highly-leveraged, weak-ish economies including Portugal, Ireland, Italy and Spain, a group of nations known collectively as the PIIGS.

Seeking safety of capital, money flowed away from PIIGS toward safer stys.  These included the U.S. mortgage market which is implicitly backed by the full faith of the U.S. government. The pattern is called "safe-haven buying" and it's why mortgage rates tend to improve when there's economic uncertainty in the world.

Over the last few days, similar concerns in Portugal have resurfaced. U.S. mortgage bonds are benefiting.

Mortgage Rates Are Falling. The Window Is Small.

When mortgage rates move, they move quickly. Especially with markets are wound as tightly as they are right now. Pricing is changing faster than at any time in the last 18 months.

Mortgage rates are changing up to 5 times daily. This is 250% faster than the 12-month average.

It's why you shouldn't dilly-dally. Stop waiting for rates to "come back". Stop thinking the markets "are due". Stop thinking you have a day "to think it over".  They won't, they're not, and you don't.

We're living through the natural correction that follows a historic rally.  Drops in rates are your signal to lock.

Don't Miss Low Rates. I Will Lock Your Mortgage For You.

If you're shopping for a loan, tell me how I can help you.

1. with the basics of what you're trying to do. Bullet points will be just fine.
2. Wait for my reply -- I'll likely have some follow-up questions for you.
3. If the pricing I come back with looks favorable, we'll lock it before rates reverse higher.

Expect me to reply to your initial email within about an hour, during business hours.

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