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:

• 47% think mortgage rates will increase
• 6% think mortgage rates will decrease
• 47% 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 The Lying Down Game.

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

"After a brief pause, rates resume sliding."

I am the only survey participant 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 every week.

And, we can't lose sight of why rates fell every week because, fundamentally, nothing has changed in the economy since. You could even make an argument that today's economy is more conducive to low rates than from April.  The jobs market has been slow to rebound, home values are stagnating, and global economies remain shaky.

Even the Federal Reserve adjusted its expectations lower.

And, why have mortgage rates dropped so far these past few months? Because there's no reason for them to do anything else. The mortgage bond markets set the tone for mortgage rates and bonds have been in rally mode.

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.

The trend is your friend.

The Subtle Signals That Change May Be Coming

Now, there's a caveat in this inertia argument. Although mortgage rates are sliding, there comes a point where that "outside force" shows up. Sometimes, it comes unannounced (i.e. change in government policy, terrorism); most times, it can be forecast.

If the bond markets were meteorological, the Doppler radar would show threats to low rates in the vicinity.

• The VIX Index is elevated
• Mortgage bonds are carving out wide ranges daily
• 5-month bond rallies are relatively uncommon

Therefore, despite low rates, now is probably not the time to sit back and see what happens.  Don't be greedy.

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. .

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 nationwide -- including 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 more than 4 properties financed are excluded. Same for pay day loans.

for a real-time rate quote.

Breaking Down The Predictions

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

• 40% think mortgage rates will increase
• 13% think mortgage rates will decrease
• 47% 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 researching the HPOA Hoax.

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

"The Fed set rates back on a downward trajectory."

I'm changing my tune. Mortgage markets are not about to rise. I see them staying at least flat for now.

The Fed Doesn't Make Rates (But It Does Influence)

This mortgage blog wastes a lot of ink on how the Federal Reserve doesn't make mortgage rates. Mortgage rates are made on the mortgage-backed securities market, then "adjusted for consumption" based on Fannie Mae's LLPA rulebook.

The Fed has nothing to do with mortgage rates. At least, not directly. Indirectly, it turns out, the Fed has a lot to do with mortgages.

As the nation's central banker, what the Federal Reserve says -- and what the Federal Reserve does -- ripples through the economy's every nook and cranny. Nothing is unaffected by the Fed and that includes the world of mortgages. So, when the Fed says things like the economy "has slowed" like it did earlier this week, it's only logical that mortgage markets react.

Over the last 36 hours, mortgage rates are down. Expect that to continue.

Beware Of The VIX -- Mortgage Rate Velocity Is Rising

With respect to falling rates, there's a major caveat. Regardless of what the Fed has said, mortgage markets remain tightly wound and scared.

Find your proof in the VIX, more commonly called the Fear Index. The VIX jumped 14 percent today, illustrating the concerns of Wall Street.

When VIX is high, mortgage rates tend to be volatile and rate shoppers tend to get screwed. The last time VIX reached record-levels, for example, mortgage rates rose 1.125% percent in less than 10 days. It was unlike anything I've ever seen.

Therefore, even though mortgage rates are low, it's not a time to wait-and-see.  A turnaround could happen just like <snap>.

Rates Are Falling, But It's Time To Lock In

Mortgage rates are really, really low. Now's not the time to be greedy. Take the bird-in-hand and 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 can have 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. .

A "rate sheet" is a mortgage lender's official pricing menu and for the first time since November 2008 -- a month marked by financial market hysteria -- mortgage lenders issued 100 separate rate sheets over the last 2-month period.

Accounting for weekends and holidays, that's 2.38 rate sheets per day on average, or roughly 0.38 more than the number of meatball sandwiches Johnny Utah is asked to buy for Angelo. Mortgage rate volatility is back in a big way, folks.

To put the pace of change in perspective, consider this:

• In the last 60 days, lenders issued 4 or more rates sheets in a day once per week
• In the last 1 year, lenders issued 4 or more rates sheets in a day once per month

The last 2 months have been a mortgage rate whirlwind.  For homeowners and home buyers in places like Cincinnati and Chicago, it's been difficult to zero in on mortgage rates and lock them in.  With rates are "expiring" every 2 hours 57 minutes, it's enough to make a person want to go back in time to, say, February and March.

The good news here, though, is that the recent volatility may be a signal that mortgage rate collusion among Big Bank Lenders is ending.

There's no evidence to support a claim like this, but for a very long while, rates trended tightly among the biggest players with very little difference in rates or points. Then, starting about 10 days ago, pricing started to open up a bit; to separate from bank to bank.

The volatility we've seen lately may really just be the return of competitive pricing to the mortgage space.  This idea is backed by the VIX -- otherwise known the "Fear Index".  The VIX is currently at its lowest levels since the September 2008 collapse of Lehman Brothers.

Or, deferring to Occam's Razor, mortgage rates may be jumpy because there's still a lot of uncertainty about the U.S. economy.

Either way, life is tough for home buyers and people wanting to refinance.

As a guy who sees rates change all the time and without much notice, I'll say this: unless you're prepared to accept a higher rate that what you've just been quoted, you may not want to gamble on getting a lower one.  An eighth-of-a-percent can add up over time but for some reason, it seems to add up a lot faster when you're wasting money instead of saving it.

If you don't have the means to watch mortgage rate changes in real-time, consider following me on Twitter.

Now, if you've never been on Twitter, it's seriously simple.  When you go to follow me, Twitter will ask you to register for a free account.  Do it.  Then, whenever you log back into Twitter, you'll see my last series of updates.  It will give you a feel for whether rates are improving or worsening.

At least 3 days per week, data from January and February 2009 shows, mortgage rates changed at least twice daily. 

Lest you think that's a rapid rate of change, scroll down the list and you'll recognize that last month came courtesy of the The Slowskys. There's been a marked reduction in mortgage rate volatility lately.

In January, mortgage rates changed every 3 hours 28 minutes, on average. In February, it jumped to 5 hours, 15 minutes.  If you ask me, it's a little fishy.

Here's why.

Mortgage rates are based on the price of mortgage-backed bonds and bond trades -- like stock trades-- are based in a fundamental and technical analysis of the economy. This can include tangible evidence like data or government policy, but very often includes intangible factors, too, such as a trader's emotional response to market conditions.

We can't ignore the impact of these impossible-to-measure market influences which we often refer to as "gut feel" or "greed".  And traders know it.  It's the reason there's such a thing called the VIX Index, a living, breathing measurement of market volatility.  The VIX is set up in such a way that it's an actual numerical representation of the market uncertainty.

Therefore, we would expect that if mortgage rates are calming, the VIX would be calming, too.  This chart says otherwise.  The "Fear Index" is no lower today than it was in October and, back then, mortgage rates were far more volatile.

So, if mortgage rates aren't changing as quickly as the VIX Index would indicate, it may mean that lenders have already priced their rate sheets up and out of the market. They may do this for profit reasons, but at least one lender went on record as saying that it's raised interest rates to slow the flow of new business.

Ed: I wish I could find that story at http://www.housingwire.com. If you have the link, send it on.

In other words, mortgage rates appear to be padded right now because lenders are understaffed.  If you're shopping for a mortgage, that extra cushion serves as a tax on you and it's nearly universal from lender-to-lender.  The good news, though, is that because the padding exists, mortgage rates stay within a tight range

Regardless, there's still good reason to get your rate locked in.  9 of them, really. 

If you're shopping for a mortgage right now, considering how many hundreds of thousands of people are losing their jobs without notice and how quickly some homes are losing value.  You're likely best-served by locking in the first fiscally-appropriate, low-rate mortgage that comes your way. Sure, rates may improve if you wait, but there's a lot of things that can go wrong while you're standing by.

Remember, you can always refinance again later if conditions warrant it.

As quickly as markets change, you can't possibly keep up on your own. Consider following me on Twitter at http://www.twitter.com/mortgagereports.  I tend to post market updates a few times daily and, of course, anytime you want a rate quote, just call or email me.  I lend in all 50 states.