what are the chances of mortgage rates going up in near future? similarly chances of going down in near future

Asked by Muthu Krishnan, 94536 Mon Dec 29, 2008

chances of rates up or down in near future by how much? any guesses?

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Brian Ripp, Agent, Fremont, CA
Mon Dec 29, 2008
Hello again Muthu,

The chances are the rates will be dropping before they start going up.
I have several great loan officers that I would be happy to give you there name and contact info.

Since the Fed's dropped there rates no long ago, mortgage interest rates have dropped.

Good luck,
Brian Ripp, Broker, CRS, GRI
Realtor since 1985
510-794-9006 wk
510-710-4905 cell
1 vote
Steven Ornel…, Agent, Fremont, CA
Wed Dec 31, 2008
Hi Muthu, I just received this from my Bank's Director of Capital Markets:

"The Federal Reserve released implementation details on its previously announced program (dated November 25, 2008) to purchase mortgage-backed securities. This is a new step that the government has taken to demonstrate its resolution to keep mortgage rates low, help the housing market & distressed home owners. Only fixed-rate MBS securities guaranteed by Fannie Mae, Freddie Mac, and Ginnie Mae are eligible for purchase. Other products such as hybrid ARMs, jumbo loans, and structured bonds (CMOs, REMICs, Trust IO/POs, and other derivatives) are excluded. Purchases are expected to begin in early January 2009, and up to $500 billion will be bought, which is in addition to the Treasury’s agency MBS purchase program, which has been running at $20-25bn in recent months. The potential size of the Fed’s purchase program ($500bn) can take down most of the 2009 agency MBS net supply. *** Therefore, the program may drive conforming mortgage rates even lower, possibly solidly into the 4% range (compared with 5.25% which is about where they are now).***"

Please share this information with the Loan Agent you have decided to work with to come up with a strategy for deciding on how to move forward. Please also weigh the fact that the operative word in the last sentence is "may."

0 votes
John J Dutra, , Fremont, CA
Mon Dec 29, 2008
Muthu, I have always been a bird in the hand type person and believe we are near the bottom of this cycle. We will have periods of dips - that is why i watch the bond market real time, but overall we are at 50+ year lows right now and moving on this now is a good idea. I personnally locked at 4.875% in 2003 and never looked back. Figure as the economy heals, money will definitely move out of bonds and into stocks, increasing bond yields and there for rates. When rates do move up, they can jump sky high and waiting may just mean missing - so be careful.
0 votes
Steven Ornel…, Agent, Fremont, CA
Mon Dec 29, 2008
Hi Mutha, daily mortgage rates are driven by world news and economic reports. We all know anything can happen on a daily basis, so daily predictions have the same odds as flipping a coin. You have to be watching the LIVE bond market to see what's happening and whether locking a rate makes sense. As an example, see the following link that shows how rates can jump:


Rates are good now, but they may be getting better with the economy in its recessionary trend.

The following two documents provide how rates are determined, and how to properly rate shop:


Best Regards, -Steve
0 votes
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