Brand New Two-Month Forecast for Mortgage Ratesby Tim Manni
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.
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.
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.
“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.
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.