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.

Rates For Conforming Mortgages Only

The fine print: These mortgage rate predictions are based on the price of Fannie Mae- and Freddie Mac-issued mortgage-backed securities. MBS pricing is responsible for rates in Cincinnati, Ohio; Lake Forest, IL; and everywhere else you can get a conforming, conventional mortgage.

On the other hand, these predictions do not cover FHA streamline refinances because FHA mortgage rates are based on the price of GNMA securities. Furthermore, "special" loans like non-warrantable condos in Chicago, condotels in Florida, 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
• 30% think mortgage rates will decrease
• 20% 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 learning when to use "i.e." and when to use "e.g.".

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

"An object in motion tends to stay in motion unless acted upon by an outside force. This week, there's no such force. Rates continue downward."

Finally -- physics and economics converge.

Mortgage Rate Rally Reaches 18 Weeks

Week after week, it's been the same story.  Mortgage rates retreat and make new, all-time lows. It's been like this since April.

If you'll remember, there was high hopes for the U.S. economy at the time.  Housing was in repair, spending was on the rise, and confidence was booming.  Wall Street was pouring into stocks and the bond market was prepared for the after-effects of the Fed's withdrawal from mortgage bonds.

It was April 8, 2010, and the average, 30-year fixed mortgage rate was 5.21%.

And then, things went sideways.

First, Eyjafallajökull erupted in Iceland and disrupted the European economy.  Next, Greece sovereign debt problems emerged.  Then, U.S. jobs data failed to show spark, among other economic disappointments. The stock market rally slowed. The bond market rally began.

And, since that time, there's been no real news to slow the flow of money into mortgage bonds, and that's what's pushing mortgage rates lower each week. It's Newton's First Law of Motion As Applied To Mortgage Rates.

Until there's a force to reverse the flow of rates, pricing will continue to improve.

The Reality Check : Rates Are Only Falling 0.03% Per Week

See, here's the thing.  When mortgage rates first started dropped, the week-to-week changes were pretty big.  10 basis points here, 15 basis points there -- it added up pretty quickly.

Since July 1, though, deltas are smaller.

Over the past 8 weeks, on average, mortgage rates have only improved by 3 basis points per week. That's a slow drip, my friends, and it's creating confusion among the people that have already joined the Refi Boom.

See, according to Freddie Mac, mortgage rates keep making new lows week after week. And, technically, it's true. Mortgage rates have made new lows 6 weeks in a row. But -- and it's a big but -- when we add up the improvements to rate over the last six weeks, we see that it only adds up to 1/8 percent.

Rates dropping 1/8 percent in 6 weeks is nothing to write home about.

That tidbit should appease any homeowners with loans in-process who feel like they locked "too soon".  Rates are essentially the same today as they've been for 2 months. The only difference is that the press is giving wall-to-wall coverage which makes it seem like rates have really dropped.  They haven't.

Rather, it's homeowners that haven't joined the Refi Boom that should get moving.

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

The consistent, gradual decline in mortgage rates is rapidly filling mortgage underwriter pipelines and bogging down the appraisal process. This leads to longer mortgage approval times which, in turn, necessitates longer rate locks.

Longer rate locks mean higher loan costs.  Ergo, don't sit back and wait another week.  Rate should fall by another few basis points, but you'll more than that in closing costs.

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. .

Are mortgage rates going up? Are mortgage rates going down? I am a regular participant in the Bankrate.com Mortgage Rate Trend survey and this week's survey may point you in the right direction.

The Bankrate.com survey is for conforming mortgages only. It is not specific to Cincinnati, nor does not apply to FHA mortgages, veterans mortgages, jumbo mortgages, or super jumbo mortgages. For a personal rate offer, .

Here's the group's 30-day prediction for mortgage rates:

• 29% predict mortgage rates will increase
• 14% predict mortgage rates will decrease
• 57% predict mortgage rates will remain unchanged

I expect mortgage rates to remain unchanged over the next 30 days.

My advice not be appropriate for your individual situation and I'm not always right. Ultimately, your time may be better spent watching this video of monkeys doing Men In Black versus reading my commentary.

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

"Strong demand for bonds offsets dollar weakness."

In currency markets, the U.S. dollar has been getting slaughtered.  It's at a 2-month low against the Euro and is similarly weak against Asian currencies.  There are some fundamentals behind the devaluation including weak consumer spending and confidence numbers,  but we can't overlook the technical factors that are driving prices, too.

As Newton tells us, an object in motion tends to stay in motion unless acted upon by an outside force.

Momentum in markets can be hard to break.

A weak dollar is bad for mortgage rates because mortgage bonds are repaid in U.S. dollars.  When the dollar loses value, the value of those repayments fall, too, rendering mortgage bonds a less-attractive investment.

Investors sell into a weak dollar.

But as the dollar has sagged lately, bonds appear to be holding their own.  Even yesterday, a U.S. Treasury auction was heavily bid.  This is because the dollar is still a safe-haven currency and it's consistent with historical trends.

When the world is running down, dollar-denominated bonds benefit.

Global economic uncertainty is creating a demand for bonds, opposite and nearly-equal to the newfound supply as a result of a sagging greenback.

Ergo, mortgage rates are flat and should remain flat until market conditions change.

Rates fell in September and markets are back to their pre-Summer levels. We've seen these rates a five times in the past 10 months and markets appear unwilling to fall further.  It's time to stop waiting around for the mythical 4.500 percent 30-year fixed mortgage and just take what the market's giving you.

Between now and Thanksgiving, rates are much more likely to rise than to fall.

Mortgage rates change minute-by-minute and getting real-time access to pricing can be expensive.  I pay for a premium service, though, and share the data in near-real time on both my Facebook Page and on Twitter.

I've helped a lot of people time their rate locks and I'm happy to do that for you, too.

Also, if you find my advice helpful and you're not already committed to a loan officer, or call me so we can work together. I happen to really like working with my readers.

And, oh yeah, my rates are really good.

Mortgage rates often follow Newton's First Law.  Commonly called "inertia", it states that an object in motion tends to stay in motion unless acted upon by an outside force.

In the world of mortgage-backed bonds, an "outside force" take many forms, including:

• Economic events (i.e. jobs and housing data)
• Political events (i.e. N. Korea missle testing)
• Psychological events (i.e. Safe Haven buying)

But of all the outside forces that alter the mortgage rate trajectory, today's most powerful one is the Federal Reserve.  Earlier this year, the Fed pledged $1.25 trillion to the mortgage markets to help keep mortgage rates low. 

It has $820 billion left to spend.

The gist of the Federal Reserve's Agency MBS Program is to create massive demand for mortgage-backed bonds over a short period of time, pushing bond prices higher and, therefore, bond yields lower.   This is why mortgage rates plunged after the Fed first announced the program in December 2008.

Here we are, though, one-third of the way through the year and one-third of the Fed's budget is gone.  Yet, mortgage rates are rising over 5 percent.  This is exactly what the Fed doesn't want to happen.  Therefore, it's entirely possible that the Fed calls an audible on the Agency MBS Program in the coming weeks, changing it in one of 2 ways:

1. Accelerate the pace of its purchases in the next 60 days
2. Increase its mortgage market commitment from $1.25 trillion to something higher

Either action would shake mortgage rates off their current trajectory, causing them to fall; and probably by a lot.

This brings us back to inertia. 

Mortgage rates respond to outside forces and the Federal Reserve may just be the ultimate outside force.  When Plan A didn't work for the Fed, they implemented Plan A-But-Bigger.  Now, if Plan A-But-Bigger doesn't work, it's reasonable to expect Plan A-The-Biggest. 

Remember, the Fed's original plan was to purchase $500 billion in agency debt.  When that was deemed too little money to make a difference, however, the Fed threw another 1-and-a-half times as much cash at the problem. 

Given how rates are rising, we can't rule out this subsequent expansion.

Increasing the size of the Agency MBS Program, or even just accelerating the rate at which bonds are purchased, would cause the rate hikes of the last two weeks to unwind overnight.  It would also provide an ample buffer against rising oil prices and inflation-centric trading that tends to draw mortgage rates up. 

If you're living in Cincinnati, Illinois or elsewhere and fear you missed the Refi Boom of 2009 -- a final Fed intervention might be your last chance to cash in.

When the Federal Reserve talks about the Agency Mortgage-Backed Security Purchase Program, its stated goal is to "foster improved conditions", Fed-speak for "keep mortgage rates low".  The higher rates go, therefore, the more likely the Fed will step in as that outside force.

Should the Fed intervene one last time, be ready to lock in when it happens.  The economy is starting to recover, after all, and once the recovery's complete, the Fed won't need to run its buyback programs anymore.

If you've got a specific interest rate target in mind,  and we'll put a "watch" on it.  When your rate hits, you'll get it.

An object in motion tends to stay in motion unless acted upon by an outside force.  We learned this from Isaac Newton 321 years ago.  And although the Netwon's First Law describes the physical world, it's relevant to the economy, too.

How else can we explain this chart from the Wall Street Journal?

Even as homebuilders predict pain in 2009 and carry confidence readings in the single-digits, they still expect a rosy 2010, it seems.  With current new home inventory at 11-plus months, this is a strange way of thinking.  Especially as the growing number of foreclosures dilutes home supply in the nation's largest markets.

So when we see homebuilder optimism for 2010, we can attribute it to the industry's belief that the government's will behave like an "outside force" on housing.  More commonly, this sort of force is called a "stimulus package" and the homebuilders aren't alone in expecting a big one.

Mortgage bond traders have been getting in on the act, too, projecting their stimulus expectations into the market's day-to-day pricing.  If you've been shopping for a mortgage this week, you've probably noticed that rates are rising and that fees are, too.  This is because mortgage rates are based on mortgage bond pricing and pricing is reflecting market sentiment.

Economic uncertainty made the rate-shopping process tough toward the end of 2008. Today, that challenge is magnified because of political uncertainty.  It's still unclear how the Obama administration will "fix the economy" and until a plan is made public, the uncertainty will remain.

Markets don't like uncertainty.  It makes them jumpy.

The only thing that mortgage markets can count on right now is that there will be some sort of outside force on bond prices and it will come in the form of an economic stimulus package.  The ongoing debate, of course, is about how large that stimulus package will be.  This is what will decide the future of mortgage rates.

For example, a stimulus package that's too large could have two mortgage-rate damaging effects:

1. It could draw money away from bonds into stocks, causing a rapid sell-off that depresses prices and raises rates. The Fed's ability to counter-balance a run like this would be limited.
2. It could lead to monetary supply inflation which, in turn, would spark a meteoric rise in mortgage rates.  Think 10 percent or higher.

Right now, the "too large" scenario is what markets are fearing.  Nobody seems to be even considering "too small".  That's one big reason why mortgage rates have been up for the past 5 days.  And until the size and scope of the pending stimulus package is defined, mortgage rates should remain jittery.

Float at your own risk.