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Will rates rise, fall or remain relatively unchanged?
Experts and Bankrate analysts provide their insights.
 Alert
me when the RTI is updated
This
week (Jan. 1 - Jan. 7) the experts say: There's no strong consensus about the direction of rates.
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| Jan. 1 - Jan. 7 |
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This week, 40 percent of the panelists believe mortgage rates will fall over the next 35 to 45 days. The rest are evenly split among those who think rates will fall, and those who believe rates will remain relatively unchanged (plus or minus 2 basis points).
Panel:
Up:
30% |
Down:
40% |
Unchanged:
30% |
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| Experts' comments and Bankrate
analysts |
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Experts' comments |
Panel |
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Look
for economic news to continue to show weakness,
which should drive rates down. Combine that with
buying from the Fed for mortgage-backed securities,
and rates should decrease from here. However,
and I know I'm repetitive here, volatility will
continue and rates will be higher on occasions,
so the timing of your lock will be critical to
get the best rate.
Jim Sahnger, mortgage
consultant, Palm Beach Financial Network, Stuart,
Fla.
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down |
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Foreign demand for mortgage-backed securities is slowing. Rates up.
Dan Green, Mobium
Mortgage, author of TheMortgageReports.com, Cincinnati
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up |
There is belief that mortgage rates will be driven lower by the Federal Reserve and Treasury if they choose to buy FHLMC/FNMA paper, rates which they, essentially, dictate. In fact, let me make a suggestion here as to what Treasury and the Fed could do in order to stimulate the economy. The Fed can create money and Treasury can borrow money at these ridiculously low rates (the 10-year yield is under 2.1 percent as I write this) and buy a new FNMA/FHLMC loan which has terms like the following:
Fixed at 3 percent for 2 years.
Then 4 percent for next 2 years.
5 percent for the remaining 26 years.
This creates stimulus on the front end because homeowners would have more discretionary spending. (Because the) Treasury is borrowing at such a low rate, it is not losing money and the mortgage payments could go to pay down the Treasury debt. If this were Fed funded with increased money supply, the payments could go to reduce money supply. The eventual rate of 5 percent is designed to make this stuff marketable so it can get off the books of the government.
Dick Lepre, senior
loan officer, Residential Pacific Mortgage,
San Francisco
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down |
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Bankrate's analysts |
Panel |
Rates are near record lows and they don't have much room to fall.
Holden Lewis, senior reporter, Bankrate.com |
unchanged |
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Greater disparity is emerging both between lenders and between loans requiring points and those with zero points. More than ever, shop around! For those that do, you'll continue to find mortgage rates at record lows.
Greg McBride,
CFA, senior financial analyst, Bankrate.com
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down |
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About the Bankrate.com Rate Trend Index
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This week: Jan. 1 - Jan. 7
