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July 27th, 2010

Brand New Two-Month Forecast for Mortgage Rates

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On a bi-monthly basis, HSH.com releases their Two-Month Forecast for Mortgage Rates. In each forecast, we review our previous prediction — evaluating the circumstances that caused rates to do what they did — and we examine current factors and conditions in order to forecast mortgage rates over the next nine weeks or so.

Each two-month forecast is made up of four parts: the preface, a recap of our previous prediction, the forecast discussion and finally the forecast itself. We’ll do a short summary of each section here on the blog, but be sure to visit HSH.com to read our entire forecast.

Preface

Housing recovery remains dormant. Persistant struggles in overseas markets, the expiration of the homebuyer tax credit and the ongoing failure of the federal modification and refinance efforts continue to put downward pressures on mortgage rates.

Recap

This two-month forecast proved to be a humbling one. What we anticipated in May — “an improving outlook for the economy, and that the late-spring euro-panic would have settled behind us to some degree” — simply didn’t happen.

Forecast Discussion

“As long as the employment market continues to be weak, housing will struggle to recover, and it doesn’t appear that there is a political solution to promoting hiring in the near-term cards.” Soft economic growth coupled with soft housing growth means that mortgage rates won’t find too solid of a footing to increase substantially over the next two months.

Forecast

By September, the summer doldrums will be over and a new season of activity will be upon us. Since we’re starting out at a period of such low rates, it’s even harder than last time to predict that rates will fall even lower:

That said, we have been wrong before, including last time, and we must acknowledge the possibility that even though at record lows that mortgage rates might move lower still.

The economy is weak, confidence is waning and there doesn’t seem to be a viable solution to promoting recovery — except time. This suggests a slow-growth, low-rate period for the remainder of the summer.

Where exactly will rates move over the next two months? CLICK HERE to continue reading HSH.com’s latest Two-Month Forecast for Mortgage Rates.

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3 Responses to “Brand New Two-Month Forecast for Mortgage Rates”

  1. Tweets that mention Brand New Two-Month Forecast for Mortgage Rates | HSH Financial News Blog -- Topsy.com Says: July 27th, 2010 at 11:19 am

    [...] This post was mentioned on Twitter by HSH Associates, Roy Hughes. Roy Hughes said: Brand New Two-Month Forecast for Mortgage Rates: … the homebuyer tax credit and the ongoing failure of the feder… http://bit.ly/cXRuXP [...]

  2. primary source verification Says: July 28th, 2010 at 4:38 am

    Thanks man, the forecast is very useful…

  3. Tim Manni Says: July 28th, 2010 at 8:14 am

    No problem

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About the HSH Blog

HSH.com's daily blog focuses on the latest developments in the mortgage and housing markets. Our mission is to relate how changes in mortgage rates and housing policy, as well as the latest financial news, impacts consumers, homebuyers and industry insiders alike. Our 30-plus years of experience in the mortgage industry gives us an edge as we break down the latest changes in an ever-changing market.

Our bloggers:

Tim Manni

Tim Manni is the Managing Editor of HSH.com and the author of their daily blog, which concentrates on the latest developments in the mortgage and housing markets.

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