Mortgage Rates, Will They Rise or Fall?

Are mortgage rates going up? Are mortgage rates going down?

Bankrate.com has a mortgage rate survey that is for conforming mortgages only. It does not apply to FHA mortgages, VA mortgages, jumbo mortgages, or foreign national mortgages. For rate quotes, contact me directly.

The group's 30-day prediction from July 16, 2009 says this about mortgage rates:

• 50% predict mortgage rates will increase
• 25% predict mortgage rates will decrease
• 25% predict mortgage rates will remain unchanged

A couple of things are happening in our market right now and none of them are good for mortgage rates.  If we use our 20/20 Hindsight Glasses, we probably could have seen it coming.

1. Home prices are no longer on a steep decline
2. Consumer Confidence is rising
3. The financial system is returning to profitability

Furthermore, Americans no longer have Recession on the Brain like they did last September and October.  Back then, the financial crisis was the leading story of every news-related show on TV and in print.

The notable absence of these The End Of The World As We Know It-like messages may be one reason why consumer purse strings are starting to loosen.  For the fourth straight month in May, Retail Sales figures were hotter-than-expected.

Consumer spending accounts for the majority of the economy's activity and, now that spending is up, Wall Street is betting that businesses will prosper.  The Dow Jones is up 5 percent since Monday.

It shouldn't surprise you, but mortgage rates have tanked over the same period of time.

In 2008, mortgage rates benefited from the stock markets' losses.  Investors fled risk and parked their dollars in the relative safe haven of the mortgage-backed bond market.  Now, in 2009, as the stock market improves, some of those safe haven trades are getting unwound.

Over the next few weeks, at least, gains in the stock market should come at the expense of mortgage rates.

Remember, though, mortgage rates move quickly.  If you're not already working with a loan officer and know you'll want a new mortgage soon, you should consider being a part of my Rate Watch program.

Call or email me anytime and I'll take a full loan application from you to keep on file and queued up. I'll ask you to pick a "target rate" and then, when I see it available on the rate sheets, I'll submit and commit it for you. We then start working toward your closing.