Mortgage rate predictions have been quite accurate in the last few weeks as I have correctly picked the bounce off of 4.78% and then two weeks later the reversal back to 4.82%.  I think we have seen an intermediate top in rates a few weeks ago when the Freddie Mac weekly survey reported that rates were at 4.86%.  I am sure many analysts and chart technicians feel that 5% will serve as a ceiling; I just do not see that happening.

With that being said, I think rates will continue lower next week but not by a large amount.  The Fed is still committed to purchasing mortgage backed securities but they have lightened up greatly with this commitment.  They are still going to fulfill the $1.25 trillion they intialed set out to buy, but it seems that they are going to do it in small increments rather than in large chunks.  By buying back MBS in smaller increments it means we will see gradually declines in overall rates rather than large fluctuations.

Last week’s mortgage rates came in at 4.82% which was just .01% off of my prediction of 4.83%.  This week I predict that we are going to edge even closer to that all time low that many media outlets have been talking about for months.  This week’s mortgage rate predictions are:

30 Year Fixed Rate Mortgage – 4.76%

If this were to happen, it will be very interesting to see how the national media takes it.  This would be about as close as we have come to an all time low since March and it would likely be national headline news if mortgage rates did break the all time historic record for lows.  There are sure to be many interesting perspectives that will come out of this if it does in fact happen.

Even if mortgage rates do not hit the historic low this week, it is likely that we will see it in the weeks to come.  The only reason we would see a true bottom in mortgage rates is if the housing market sees a drastic improvement.  Unfortunately that is just not the case in the current market.  Home prices are continuing to decline and we are still seeing an abnormally high number of foreclosures and short sales.

President Obama is doing everything he can come up with to make the housing market better but the economy is not helping at all.  Most major corporations are continuing to lay off workers and the economy is not getting stimulated by those who actually do have money.  It sure seems the case that those who do still have money are the ones who have always been smart with their financial decisions and saved.  It is these frugal individuals that are helping keep the economy afloat, but they are doing little to actually “stimulate” it.

The individuals that were stimulating the economy during the 1990s and early 2000s are the same ones that we would consider subprime borrowers today.  They are the ones who maxed out their credit cards and made sure that they had their hand in at least two properties.  It is now the case that this individual is broke and looking for a job.  Unfortunately, if they do not have a job, they are finding it extremely difficult to make ends meet as very few financial institutions are willing to cut them any slack because of their bad financial decisions.

It will be interesting to see if the frugal individual that has been saving from day one will actually do his or her part to stimulate the economy.  I honestly feel it is not in their blood to spend a great deal of money.  I have many friends who are this way and they will never make large purchases no matter how much money they have.  They will continue to drive the 2001 Honda Accord that they bought used.  They will continue to live in the same house even though they could afford a mortgage of at least $100,000 higher.

These particular individuals are the ones that could get amazing deals in the current economy.  As one of my best friends likes to say, “now is the best time to spend great amounts of money because everything is on sale.”  This is definitely the case as corporations are trying to do anything possible to make an extra dollar or two.  If you have been thinking about taking a vacation, this year might offer the cheapest vacations ever, even to exotic locations.  If you have thought about buying a new car or boat, this might be the year as many of these companies are going out of business.

Most activities and objects that cost over $2500 are greatly discounted in the current economy; including houses.  The excess amount of housing inventory on the market is causing prices to plummet.  If you have been considering buying a house but have been reluctant in the past; this may be the year for you to buy that house.  Many home owners that are trying to unload homes are willing to take an offer well below the listing price just to get some money out of the house.

Now that you know mortgage rates are likely to head lower, it is a great time to start zeroing in on the exact house you want.  Even if the price is not exactly what you want, you may be able to wait a few months and over a price that would be well within your means.  It is not likely homes are flying off the market left and right so make sure to be patient with your decisions.

There is an unbelievable amount of information on the internet so please do your best to educate yourself before going into the home buying process.  By doing a quick google search and looking through some mortgage blogs you will do yourself a huge favor.  It may save you $10,000 in the long run if you actually take these steps early in the purchasing process.

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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

This is a tough week as the stress test results were released and MANY financial institutions are asking for more money.  It will be interesting to see how mortgage rates react to this but my prediction is:

30 Year Fixed Rate Mortgage – 4.87%

The weekly data that was collected by Freddie Mac showed rates at 4.86%.  Now that we have seen two weeks of increased rates I feel that the Federal Reserve will put its foot down and sink more money into mortgage backed securities.  Everyone is attempting to analyzing the data to find out if the housing market has hit a bottom but no one will know until months after the bottom has been put in.  This is the exact reason so many people lie or die by financial markets.  If you have the ability to time it perfectly, you can be a very rich individual.  If you are always a step behind, you lose money every single year.

If you have been debating on getting a refinance, do not worry too much.  Rates will come back down as Ben Bernanke and the Fed are going to continue to do everything to get the economy jumpstarted.  I would advise you to get your home appraised and find out the approximate refinance rate that you will get as this is truly one of the best times in history to take this financial step.

August 17th – The current mortgage rate predictions article can be found here:  Mortgage Rate Predictions – Mortgage Rates Around 5.2% in Mid August.  Mortgage rates remain historically low and it looks like it is going to stay that way for some time as the Government continues to work very hard to keep interest rates low.  The article goes into great depth about where we have been and where we are likely to go as far as mortgage rates are concerned.

The July 19th mortgage rate predictions article can be found here: Mortgage Rate Predictions – Interest Rates Up Big This Week. There is very bad news on the horizon as the 10 year treasury rate yield continues its strong uptrend. It looks like the long term mortgage rates trend is bottoming and we are likely to see much higher mortgage rates. How much higher? Check out the article to find out!

The July 6th mortgage rate predictions article is available here: Mortgage Rate Predictions – Rates Ready to Make a Strong Move. Average mortgage rates are likely to make a strong move in one direction but do you know which direction that is going to be? Stay tuned to Subprime Blogger to find out!

June 29th – The most up-to-date mortgage rate predictions article has been published here: Mortgage Rate Predictions – Rates Find Support This Week? Also remember that on Subprime Blogger we are going to release daily mortgage rates and how they correlate to the to 10 year treasury rate; please check back in every morning to get a prediction of where rates are headed based on the daily trading moves of the 10 year treasury rate.

June 23rd – I recently updated my newest article on mortgage rate predictions, please check it out and share with friends: Mortgage Rate Predictions – Rates Remain Stable

June 15th -  Mortgage Rate Predictions – Mortgage Rates Stabilize in Late June?

June 12th – My prediction for this week was

30 Year Fixed Rate Mortgage – 5.49%
ACTUAL 30 Year Fixed Rate Mortgage – 5.59%

Yesterday evening I wrote that mortgage rates are going MUCH higher.  The 10 year treasury rate almost hit 4% this week but has seen some heavy selling since then.  This is exactly what I expected but we still need to see where the treasury yield finds support.  This will determine where mortgage rates are going to go from here.  Selling of the yields suggests we will at least see some stabilization but lets see what tomorrow and early next week brings.

June 6th – The 10 Year Treasury Yield continues to rise towards 4%.  By looking at this chart you can see that the 10 year yield has been in a steady uptrend since the end of December of last year.  Many analysts believe that the increase in the yield is a sign of confidence that the economy is getting better.  One thing remains true throughout recent history, as the yield rises so do interest rates.  I am not sure that I am as confident as others that the economy is getting better but I cannot fight the fact that investors somewhere feel that way.  With that being the case, I strongly think rates will rise again next week.

Mortgage Rate Prediction for June 11:

30 Year Fixed Rate Mortgage – 5.49%

The mortgage rate survey from Freddie Mac came in this week, June 3rd, at 5.29% which is up HUGE from last week’s rates of 4.91%.  The housing market is going to greatly struggle if rates continue higher like this.

Mortgage Rate Prediction for June 4:

30 Year Fixed Rate Mortgage – 4.98%
ACTUAL 30 Year Fixed Rate Mortgage – 5.29% (WOW!)

I personally think the uptrending 10 year treasury yield will bring mortgages rates oh so close to 5%.

Last week the Freddie Mac weekly mortgage rates survey reported an overall average of 4.80% vs. my predicted 4.77%.  The 30 year fixed rate dropped slightly in part because the Federal Reserve purchased $50 billion in mortgage backed securities during the prior week.  The objective of the Fed it to put a ceiling on mortgage rates and that ceiling is getting lower and lower each week.  Last week the Federal Reserve reported that they increased their purchase of MBS’s by 50%; this is sure to send mortgage rates even lower.

Current mortgage rates are artificially low because of the actions by the Federal Reserve Bank.  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%

The data produced by Freddie Mac on Thursday should be quite interesting this week as we are likely to hit another “all time low” in terms of survey data.  It is still unknown if this drop in mortgage rates will help the overall housing market, but the government is sure giving it a try.

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