Back in August, I’m not sure anyone anticipated that mortgage rates would fall as low as they have in recent weeks.
While HSH.com, along with many other mortgage-market observers, knew mortgage rates would remain at historically low levels, the depths to which they’ve fallen over the last two months surprised just about everyone.
On a bi-monthly basis, HSH.com releases our 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 economic 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: (1) the preface; (2) a recap of our previous prediction; (3) the forecast discussion; (4) 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 Two-Month Forecast for Mortgage Rates.
Just a reminder: The latest edition of our Two-Month Forecast for Mortgage Rates has been published.
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.
What’s on tap for the future?
Thinking about buying a home or refinancing your current mortgage sometime soon? If so, you’re going to need to get an idea of where mortgage rates are headed in the near future.
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.
What’s on tap for the future?
A lot has changed since December 2009 when we wrote both our last two-month forecast and our 2010 Outlook for mortgage rates. We decided to delay the release of the February two-month forecast in order to give us some more time to consider the changes that were and still are forming in the mortgage market. Although delayed, we have published the latest Two-Month Forecast for Mortgage Rates.
At the dawn of the new year, the Fed was slated to move forward with their plan to end their mortgage-backed security (MBS) purchase program on March 31, 2010 — a plan that for nearly 16 months drove mortgage rates down to record lows. At that time, there was no other plan in place to pick up where the Fed’s plan would leave off. However, a lot has changed in three months.
Mortgage rates rose again during the holiday-shortened week, according to the latest issue of HSH’s Market Trends Newsletter, “Mortgage Rates Move Higher.”
Although last week’s move upward marked the third consecutive weekly increase, “It’s important not to make too much of the flare in rates“:
Holidays are now in full swing, markets are thinly populated and traded, and exaggerations in market moves are common. Some of the rise in yields [last] week appeared to be money shuffling from bonds and into equities to take advantage of any “Santa Claus” rally in stocks. Since there has been a four-day “winning streak” it would seem that this is the case at the moment.
Unfortunately we can’t predict the future, but we can sure try and forecast it. Six times a year, HSH releases a two-month forecast for mortgage rates in which we rely on our 30 years of industry experience to anticipate where and how the markets will move.
Rates fell further than we thought over the last two months. While we accurately predicted the gap of the spread between high and low, borrowers who accessed credit were thankful we overbid:
HSH’s latest two-month forecast for mortgage rates is in. While rates trended higher than we thought they would during the last forecast period, “Our expected range of movement was pretty good, but rather than moving to the lower end of the scale, we moved to the upper side instead.”
Here’s just a taste of our latest forecast: Read the rest of this entry »
…has been posted. Our forecast for mortgage rates during that period were on the mark — all the more amazing given the turmoil in the markets. Will we do it again this time? Stay tuned!
We also continue to be pessimistic about the government’s string of mortgage bailouts:
Every two months, the mortgage-market analysts at HSH recap the events of the past two months, and make a prediction on the future direction of mortgage rates.
“Since our last forecast, significant portions of the residential mortgage market have been reshaped due to government intervention and — in some ways — due to a lack of government action. We’ve come through an election cycle, seen hundreds of billions of dollars spent trying to comfort financial markets, and heard the promise of hundreds of billions more dollars in various forms of ’stimulus’ that may be on the way. For mortgages and real estate, at least one important support is in place; others may arrive under a new administration.”
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.
