Need a mortgage rate prediction? I am a regular participant in the Bankrate.com Mortgage Rate Trend survey and this week's survey may help you.
By way of disclosure, 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 mortgage rates. Furthermore, unique property types including non-warrantable condos and condotels may be excluded.
for a real-time rate quote.
Here's the group's mortgage rates predictions:
- 27% predict mortgage rates will increase
- 0% predict mortgage rates will decrease
- 73% 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 watching The Greatest Network Television Weather Forecast of All-Time than reading my analysis.
Either way, here's what I told Bankrate.com:
"Markets are in a Tug-O-War -- it's Geopolitics versus The Fed."
There's lot of reasons why mortgage rates change -- revised expectations for the economy, new Fed monetary policy, and psychological factors on Wall Street are among them.
In total, there are hundreds of influences on the day-to-day mortgage rates you and I see from the banks. It's part of why predicting mortgage rates so challenging. We can never know which of the hundreds are influences are about to come into play.
We can break influences down into two parts -- obvious, and non-obvious.
Obvious influences are inflation data, housing stats, and job markets. These we can prepare for; can be proactive about. And, indeed, Wall Street does. The preparation is why mortgage rates tend trend higher or lower heading into a "major" news release. The movement is the market squaring its bets.
It's the non-obvious factors, though, that really screw things up.
- An "emergency" change to monetary or fiscal policy, at home or abroad
- A sudden change in the political climate, at home or abroad
- An outbreak of -- or an end to -- war, terror, disease or the like, at home or abroad
In other words, anything that "shocks" the global financial system.
There was a terrific example of such a shock two weeks ago. One day, everyone woke up and suddenly thought Greece couldn't meet it country's debt obligation. The thought drove fear through the Eurozone, then through the broader market, and eventually, it led to safe-haven buying that propped up U.S. mortgage markets.
There's other recent examples, too. Like when the Fed initially announced its support for the mortgage-backed bond market in November 2008; or, when inflation numbers ran much hotter-than-expecter near the end of May 2009.
It happened yesterday, too.
The Fed released the minutes from its January 2010 meeting Wednesday afternoon and there was an underlying message that "change is coming". Markets didn't expect to hear that just yet and it sent mortgage markets reeling. Rates spiked by an eighth-percent within minutes of The Minutes' release.
As a rate shopper, unexpected news is frightening. It makes markets do things you wouldn't expect. And that's why we're calling for a draw over the next week. The likelihood of Eurozone debt concerns leading mortgage rates lower will be offset by the tendency of rates to rise when the Fed starts talking strength.
That said, if you need a rate locked in the next week or so, consider doing it sooner rather than later. The Fed's exit from the mortgage market is going to push rates up and that exit's in less than 5 weeks. It's time to get a move on.
Locking mortgages is a timing game and you'll want some help to get it right. Call your loan officer or, if it's easier for you, with your situation. I handle all of my own email and I am happy to get you a good rate lock. It's what I do best.
Plus, my bank has good, low mortgage rates. Just ask me about it.
Dan Green is an active loan officer. Email or call 513-443-2020. Dan is on Twitter at @mortgagereports.