As stock markets finish a quarter marked by high volatility, mortgage pricing seems to have settled down a bit. Last month, for the first time in more than a year, mortgage lenders held their morning pricing all the way through market close.

This is an odd development, though; incongruent with market data. Since March, mortgage markets have been exposed to massive government intervention, the emergence of both a Bull and Bear stock market, and countless questions about the health of the economy.

Normally, this would cause mortgage rates to bounce all over the place. Last month, it didn't.

And while there's no evidence for proof, this loan officer thinks rates are suddenly less volatile because lenders aren't pricing loans on razor-thin margins anymore.  As bond markets pressured bond prices lower in March, mortgage lenders chose to hold their rates up, and pocket the difference as profit.

It's like a gas station keeping pump prices high as the cost of oil falls.

In the minds of rate shoppers, rate sheets aren't changing much, creating the semblance of mortgage market stability.  This point is illustrated in the graph above.  The reality, though, is something entirely different. Mortgage markets have been extremely volatile lately and we may someday find out that lenders left rate sheets as-is last month because the printed price guides had already been stuffed thick with profits meant to withstand market shock.

Rates are changing every 5 hours, 32 minutes on average. This is two hours longer versus January.

The good news here is that home buyers and refinancing homeowners don't have to rush to get their pricing locked up as quickly are they to. The bad news is that today's rates may be artificially pumped up.

I am a regular participant in the Bankrate.com Mortgage Rate Trend survey and this week's survey is now available.

The Bankrate.com survey is for conforming mortgages.  It does not apply to FHA mortgages, VA mortgages, jumbo mortgages, or foreign national mortgages.  For rate quotes, .

The group's 30-day prediction for mortgage rates:

• 31% predict mortgage rates will increase
• 31% predict mortgage rates will decrease
• 38% predict mortgage rates will remain unchanged

I am predicting that rates will increase over the next 30 days. My prediction may not be appropriate for your individual situation and it may be wrong, too.

Here's what I told Bankrate.com:

"The stimulus package's breadth will harm mortgage bond markets."

A lot of what's happened to mortgage markets since late-November have been based stimulus plan predictions.  Markets are pretty certain that the package will aim to stabilize housing and banks -- it just doesn't know by how much.  At first, the guess was $500-700 billion and mortgage markets liked that number. 

Strangely, when the media talked about it, they neglected to mention the range, instead latching on the $700 billion part.  Maybe it was the psychology of the reporting or just good vibes, but around that time is when mortgage rates took their first plunge, kickstarting the current Refi Boom.  Markets probably liked a $700 billion figure more than a $500 billion one. 

But $700 billion may also have been the limit of the market's tolerance.  We say this because on January 15, House Democrats unveiled a pumped-up version of the original stimulus plan worth $875 billion.  The unexpected costs of the plan promptly sparked dollar devaluation fears.  It was on that day that mortgage rates stopped falling.  

Bond markets started to erode January 15 and with each passing day, mortgage rates have gotten worse. On-the-fence rate shoppers in places like Mason, Ohio and Lake Forest, Illinois now wonder if they gambled on rates too long.  Sadly, the answer may be "yes". 

Wednesday, in his Capitol Hill testimony, Obama economic advisor Paul Volcker said that "several trillions" may be necessary to right the U.S. economy.  This is the same guy, you'll remember, who helmed the Federal Reserve when interest rates shot past 15 percent.  Volcker is not averse to strong and painful medicine. If he says we need trillions (with an s), it could happen.  And that could further devalue the U.S. dollar, pushing mortgage rates up more.

Mortgage rates move for all sorts of reasons but inflation via currency devaluation is a pretty tough for markets to ignore.  The larger the stimulus package, the more that rates will rise.

In the meanwhile, I post mid-day mortgage rate updates on my Twitter feed. Follow me at http://www.twitter.com/mortgagereports and join the conversation anytime.