Mortgage Experts Agree on Rate Increase

Each week, national surveys such as bankrate.com gather feedback from mortgage experts to get a sense of what direction mortgage rates are moving.

Two surveys are conducted to create a deposit index and a mortgage index. A panel of at least 100 field experts are reached, including mortgage bankers, mortgage brokers, lenders and other industry professionals that have a thorough knowledge or expertise in providing residential first mortgages to consumers. The experts’ hypotheses along with current data give a fairly accurate report of the mortgage rate trend and where it is headed.

This week, Nov. 18-24, 2004, mortgage rates are predicated to rise in the near future. They will definitely not fall, according to experts. This makes the chance of a decline in the mortgage rate zero percent, the chance of an increase in the rates 57 percent, and the chance that they stay the same 43 percent.

Over half of experts think rates will rise in the next forty days or so, and others believe they will stay the same, give or take two points. No one thinks the rates will fall.

Informants added comments that mentioned the inevitability of an increase in rate, the insignificance of deposit rates on affecting the mortgage rate, the threat of inflation and the decrease in dollar value pushing long-term rates up. Some believe that this rate will rise drastically while others think the rate will only move slightly. Those that say it will remain steady are of the opinion that there are no factors to teeter it at the present time.

The survey does not get into the consequences or effects of these rate changes, if correct, but other industry sources go into further depth on the expected problems that accompany these trends, both in the market and in the economy. Gaining an awareness of the predicted trends and the possible effects is wise for consumers who are affected by these mortgage rate changes.