The current mortgage rate predictions are very bad news for those of you who were hoping to get a lower interest rate this week.  Last week we saw the 10 year treasury rate yield jump over 10%!  This is a huge number for a one week move.  To compound matters, the 10 year yield is now above the 50 day moving average and that is looking to be a support level.  We could very well see an assault of 4% on the 10 year yield sometime very soon, maybe even in the next few weeks.  If this happens, expect those low mortgage rates to move up towards 6%.

Last week we saw that the Freddie Mac weekly mortgage survey showed overall mortgage rates being down.  That will not be the case this week.  While we do not know where the 10 year treasury rate is headed for the first half of this week, it is highly unlikely that it is going to tank well below its 50 day moving average.  With that being said, this weeks mortgage rate predictions are:

30 Year Fixed Rate Mortgage – 5.42%

If this is the case, it will be WELL above last week’s number and there will be a huge media push that mortgage rates are heading much higher again.  By reading Subprime Blogger, you stay well ahead of the crowd!

Please check out the daily Subprime Blogger rant; today I let Mr. Bernanke know how I feel:

Oh, so you are planning now for the “restoration of fiscal balance?”  I call bullshit!  The more statements that you make, the more I realize that you are full of shit Mr. Bernanke.  Printing money in an attempt to spend our way out of this recession has not worked in the past so why do you think it will in the future?

Read the entire article here: Ben Bernanke, Please let the Markets Set Interest Rates

Freddie Mac’s weekly mortgage survey showed that average mortgage rates for the 30 year fixed rate mortgage this week were 5.38%; this is actually less than my mortgage rate predictions, but I was quite confident that rates were going to fall as the 10 year treasury note has taken a tumble since reaching 4%.  Today we are actually seeing a 4% daily bounce in the 10 year so we will see if that picks up any steam.  Current mortgage rates are likely to remain volatile as the treasury yields have been extremely unpredictable lately.  The best thing for the current housng market would be for mortgage rates to stablize, but it does not look as if that is going to happen.

The 30 year fixed rate mortgage has taken quite a wild ride in the last month.  This is not good at all for the sentiment of the market.  Mortgage rates are hard enough to figure out as it is.  Home buyers want to see stablized, lower rates so they know what they are jumping into.  That has definitely not been the case as average mortgage rates have moved as much as .75% in ONE day over the last few weeks.  Hopefully this is not discouraging home buyers, but be rest assured that it is making people think twice.

Another major factor with current mortgage rates flucuating so much is that refinancing is harder to do.  If home owners were considering refinancing and they see that average mortgage rates have been all over the map, some of them feel it is not worth the time, effort and closing costs to go through with the process.  This is going to hurt the economy even more as it will be less money in the pockets of home owners who are considered prime borrowers.

How high will mortgage rates go is a question that almost every home owner is wondering right now.  Over the last three weeks mortgage rates have gone from 4.8% to 5.59%.  Some nationwide mortgage lenders are reporting rates as high as 5.95%.  This is a very scary thought if you were in the refinance process.  It is an even scarier thought if you are planning to buy a house in the next few months.  The difference in a percentage point on a 30 year fixed rate mortgage could be tens of thousands of dollars over the lifetime of the home loan.

Another major area of concern are those trying to get a home loan modification to stay in their homes.  President Obama created the Making Home Affordable plan in an effort to allow everyone access to low mortgage rates.  Well, what if mortgage rates are no longer low?  For those that cannot make their mortgage payments and were hoping to modify to low payments, higher mortgage rates might be the nail in the coffin.  Mortgage lenders and banks will still work with these individuals but there is nothing the financial institutions can do if rates are moving higher.

I personally feel that the fluctuation in mortgage rates is very bad news for the overall housing market.  When mortgage rates were near historical lows, we still did not see a bottom in home prices.  Now that mortgage rates are going higher, home prices are sure to fall even more.  Maybe this is just what we need, a final freefall in home prices that will clear out all the excess supply.  It is a very scary thought, but sometimes its easier to just rip the bandaid off rather than slowly pulling it as we have been for over a year now.

30 Year Fixed Rate Mortgage – 4.83%

I am not 100% sure why I feel this way but it is a hunce.  Let’s see what happens on Thursday.

Mortgage Rate Predictions

Knowing that the Fed scaled back greatly this week, I personally feel this is a week we are likely to see a slight uptick in mortgage rates.  Last week’s survey showed overall rates coming in at 4.78% which is one of the lowest readings in history.  This weeks mortgage rate predictions:

30 Year Fixed Rate Mortgage – 4.84%

Freddie Mac’s weekly survey reported mortgage rates at 4.84%.  It seemed quite obvious to me that the scaling back of MBS purchases would support higher mortgage rates.  Mortgage rates only bounced .06% but MANY financial gurus continue to predict mortgage rates to free fall each and every week.  Now that we have seen a short term bounce in mortgage rates, will the Fed amp up their MBS purchases to make sure rates continue their overall slide?  We will be the first to let you know the the Federal Reserve Bank releases the data depicting how much they dumped into mortgage backed securities.

Even though we got a short term bounce, it is still one of the best times in history to refinance or buy your first home; IF you can qualify and get through the mortgage application steps.  Do not be naive and think just because your credit is ok that you will be able to get a mortgage rate under 5%.  Realize that you need to be on very good financial ground to get the advertised rates you have seen.

Mortgage Rate Predictions

Unfortunately, the government is not letting free markets work themselves out but this is not different than any other part of the business world today.  Now that the Fed is accelerating the amount of money they are dumping into MBS’s it is hard to predict a rise in mortgage rates in the near future.  This week’s mortgage rate predictions:

30 Year Fixed Rate Mortgage – 4.76%

Freddie Mac’s weekly mortgage rate survey reported 4.78%.  Once again I was within .02% of being exactly correct but that could change at any time in the weeks ahead.  With mortgage rates at historic lows in terms of modern history, now is the time to refinance or buy your first home.  It is likely that the Federal Reserve Bank will continue to push mortgage rates lower, but it is quite risky to take the chance of the housing market bottoming and mortgage rates sling shooting right back up.

Make sure to check back in next Monday as I will release my weekly mortgage rate predictions.  On Thursdays I will do my best to post a follow up reflecting the accuracy of my predictions.

Guest Writers….

For the first seven months of this blog I have opened up the forum to a few readers who had the desire to post their feelings through articles.  After realizing how much passion some of the readers have for the current economic crisis and the mortgage industry, I am going to allow YOU, the reader, to send me articles to post.  The only requirement I demand is that you have PASSION for what you write and it must involve the housing industry.  I would actually prefer you to be strongly opinionated as that is the point of this blog.  If you are interested in writing every once in awhile or every single day please email me at jwojdylo@subprimeblogger.com.  I look forward to posting your articles and getting engaged with the reader.

Now that we know the government is spending huge somes of money to lower mortgage rates, we cannot go against the trend.  This week’s mortgage rate predictions are as follows:

30 Year Fixed Rate Mortgage – 4.77%

If this does happen, it will be the all time low since data has been collected (1971). Get ready to hear news headlines around the clock making sure that you know this is the case!  These are definitely artificial interest rates, but take advantage of them while you can.

Mortgage Rate Predictions

After three very successful weeks of mortgage rate predictions, I am going to go out on a ledge and make the prediction that mortgage rates will bounce higher.  I do not think they will bounce MUCH higher, but we will see a stop to the steady declines.  No need to worry as the overall trend is still down but this week, we will see rates up a tad.

30 year fixed rate mortgage – 4.86%

Freddie Mac released their weekly survey last week and it showed……4.87%.  I am definitely on a roll as most of the analysts are predicting for rates to go under 4.5%.  If you want a true predictor of mortgage rates, make sure to check out Subprime Blogger each money.