I came across a Bankrate.com survey and thought to share it . The bankrate.com survey is for conventional, conforming mortgages only. It does not apply to FHA mortgages or jumbo mortgages. Nor is the survey specific to California. Email me , John@JPMortgageLoans.com, anytime for a real-time rate quote.
Here's the survey's 30 day prediction for mortgage rates:
36% predict mortgage rates will increase
18% predict mortgage rates will decrease
46% predict mortgage rates will remain unchanged
I expect mortgage rates to remain unchanged, as long as the Feds are purchasing Mortgage Back Securities (stay turn to see if this continues after March 2010). My advice my not be appropriate for your individual situation and I'm not always right (just ask my wife). Ultimately, you may find your time better sent on learning that George Washington invented instant coffee than reading my analysis.
Either way, here's what I think:
"Markets move into wait-and-see mode on the economy and the Fed."
It's been a wild few weeks in the mortgage markets. December was a shoot-out that left every "floater" dead. Since the New Year, though, markets have been easing and rates have been falling. The market is closed today, Martin Luther King's Day. But last week, mortgage rates were at their best levels of the year.
In an it-won't-sound-so-strange-once-you-understand-how-mortgages-rates-work kind of way, rates are down for the same reason they were up -- EXPECTATIONS on the economy.
See, when December started, the jobs report showed net job growth very close to flat. Wall Street got very excited about it. Plus, housing showed more growth and Retail Sales punched in way bigger than projections. At the same time, members of the Fed were stumping for a raise in the Fed Funds Rate and a need to be wary of runaway growth. This, too, got Wall Street excited and as of December 31, 2009, the economy hinted at recovering and expanding at ludicrous speed. Because of this, mortgage rates made there biggest 1-month jump of the year in December. Since then, however, it's been a mixed bag.
January's job report and retail sales report both went negative, and Pending Home Sales failed to impress. Furthermore, there has been a general softness about the economy and Fed members have gone silent on the Fed Fund Rate matters. It's a reversal from December and expectations for 2010 are dialed back a bit. Mortgages rates are falling, but have likely bottomed out for now.
We are witnessing a stasis. The economic forces of expansion and contraction seem balanced. Data is contradictory and difficult to interpret. Wall Street is unsure of what's next. Mortgage rates should stay in a tight range between now and the Super Bowl. There will be days when rates are down, and days when rates are up. The key is picking the right day to make your rate lock. Be patient, but not too patient. Locking mortgages has always been a game of timing. And for that, you may need some help.
If you don't have a mortgage planner you can call for advice, know that you can always call me. Or, send an email, whichever is easier. I handle all of my own emails and I would be happy to help you lock your mortgage rate.
John Payne is an active mortgage planner. Reach John via email at John@JPMortgageLoans.com or call 510-799-1400 or toll free at 800-259-3424.
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