Fall brings cooler weather, changing leaves...and maybe lower
mortgage rates.
Loan officer Dan Green analyzed data from Freddie Mac (FRE) and
found that 30-year fixed mortgage rates have the tendency to rise
during May through August, before settling lower in the fall
season. Green is a loan officer with Waterstone Mortgage.
But that's not the only reason he predicted mortgage rates will
fall over the next month in Bankrate.com's recent mortgage rate
trend survey.
In fact, half of the industry experts surveyed by Bankrate this
week say that rates will fall over the next 35 to 45 days.
Twenty-nine percent think rates will rise; the rest think rates
will remain about the same.
One reason why Michael Becker, a mortgage consultant with Green
Pastures Mortgage & Finance, says that rates will continue to
drop: his belief that inflation fears are overblown.
"While it is true that the (Federal Reserve) is printing an
extraordinary amount of money, that extra money won't cause
inflation until it is borrowed (new credit is created)," he wrote
in a comment posted on Bankrate. "Credit is being destroyed faster
than the Fed can print money because consumers have neither the
ability nor the inclination to take on additional debt. As these
facts become more and more evident, deflationary concerns drive
mortgage rates lower.
"If you missed out on the low rates of earlier this year, get
ready, because this fall we may approach the lows in mortgage rates
reached earlier this year."
In a recent piece for The Wall Street Journal, Brett Arends also
points out that borrowers have another opportunity to get in on low
rates. Home loans are getting cheaper with the slump in the yields
on long-term government bonds, and a borrower with good credit
might be able to get a 30-year fixed-rate mortgage for as little as
5%, he writes.
Read Arends' piece in this week's real estate pages and check
out the latest results of Freddie Mac mortgage rate survey. Plus,
read a Realty Q&A that examines mortgage responsibilities after
the death of a borrower.
And if you missed the window to refinance into a lower rate this
spring, stop reading and get your paperwork in. Now is your second
chance.
-Amy Hoak; 415-439-6400; AskNewswires@dowjones.com