Tuesday, October 09, 2007

Predictions on US interest rates and where they are heading over the next while


This is what the so called experts are predicting on US interest rates and where they are heading over the next while.


This week (Oct. 4 - Oct. 10) the experts say: There is still much uncertainty as to whether rates will rise or fall.


Experts' comments
The 10-year is currently trading at 4.55 percent and has not moved much, which is no surprise. Conforming rates have been steady. The jumbo market has stabilized a bit, with some big players coming back into the market and others making pricing corrections for the better. We will continue to see an improvement in rates through the end of the year. Remember the Fed is watching LIBOR closely and that will help determine what the Fed does next month.
Mitch Ohlbaum, president, Legend Mortgage, Los Angeles

Stocks will soon tumble as consumer spending continues to slow. Bonds will soon rally, meaning mortgages will become much more affordable.
Jeff Lazerson, president, Mortgage Grader, Laguna Niguel, Calif.

This market doesn't have enough data, one way or the other, to cement a major shift. One thing is certain: Locking your loan early is the best bet. Mortgage bonds are trading in a range with stiff upward resistance and the slightest sign of inflation could send interest rates through the roof overnight. Expect volatility.
Dan Dowling, president, United Mortgage Capital Corp., Altamonte Springs, Fla.
unchanged
Money is flowing back into stocks at the expense of mortgage bonds. Rates will move higher as a result.
Dan Green, mortgage planner, Mobium Mortgage, Chicago

We are sitting in the middle of a six-week range of interest rates as short-term volatility is becoming the norm. What's causing this are inflationary fears from the last and forthcoming cuts from the Fed tempered by weak economic data. Look for this to continue. Opportunities will exist to capture a lower rate on the right days.
Jim Sahnger, mortgage consultant, Palm Beach Financial Network, Stuart, Fla.

We are seeing some lower rates from jumbo investors, but it is obvious that they still have to sell the stuff they have been sitting on for the past two months. With the housing market soft and mortgage rates artificially high with lower demand, there is little reason to sell that stuff at a loss unless there is opportunity to loan that money again at a profit. It is sort of a Catch-22.
There is no underlying problem here. The folks who hold those mortgages will sell them and the machine will get running again, it just appears that they are in no hurry.
There are a few strategic things which will result from this. Some banks will only make mortgage loans originated by their own employees. Some may stop taking loans from brokers.
Dick Lepre, senior loan officer, Residential Pacific Mortgage, San Francisco

Bankrate's analysts
The forward path of mortgage rates will hinge on the outcome of the employment report. I'll say that revisionist history shows job growth in the past two months and, while not pretty, it wasn't as bad as initially thought. This will give mortgage rates a slight bump.
Greg McBride, senior financial analyst, Bankrate.com

The economy appears to be slowing down. Today's rates seem low by this summer's standards, but they were lower than this for much of last fall to this spring. Those lower rates are the norm.
Holden Lewis, senior reporter, Bankrate.com


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Mark


A. Mark Argentino
P. Eng. Broker
Specializing in Residential & Investment Real Estate


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