How The Mortgage Rate Is Predicted To Look During The Holidays
Posted by David Schneider | December 27, 2007

With the Holiday season upon us, people are wondering whether mortgage rates will increase or decrease. Homeowners or potential homeowners are constantly checking the mortgage rate forecast for the right time to lock in their rates. Since the jolly retail season is here, many speculate this will transfer to the housing market and cause a dip or rise in mortgage rates. Others predict the mortgage rate will stay the same or close to it. So, who do you listen to?

The Skinny on Mortgage Rates

If you are holding out for the lowest possible mortgage rate, it may be a gambling process. When it comes to mortgage rates, rates will lower at a smaller pace — for instance, it'll probably decrease around 1/8 percent. However, when a rate increases, it takes a major leap, blindsiding you and then you have missed your chance with a low mortgage rate. This happens to be the nature of the beast.

Those involved with setting the mortgage rates are obsessively monitoring the rates. They are waiting for any minute decrease, no matter how small it is. In addition, when rates are making their way up, they wait until the last second to announce the rate, which ends up being an enormous jump from the previous rate.

The Plateau Phase and Predicting Mortgage Rates During the Holidays

The majority of experts and analysts have predicted that during the holiday season, mortgage rates will stay the same. The main projection is that rates will not go any lower. The holidays center around the retail market and the interest in the housing market will not gain extra demand during the season. The value of housing appears to be stuck in a secondary market. Buyers aren't looking for primary housing, they are investing property as a secondary home.

Mortgage Rates and the Holidays — An Upward Battle

A few analysts have expressed their concern that mortgage rates will rise during the holidays. Since the value of the U.S. dollar is falling and oil prices are at record highs, mortgage rates will soon reflect the struggling economy and try to balance out by increasing the rates.

Mortgage Rates and the Holidays — A Downward Spiral

A handful of experts predict that mortgage rates will continue to fall. They believe that the increasing oil prices are a sign of a future recession, which in turn will cause mortgage rates to follow the existent downward spiral. The housing market and rates will reflect the economy.

The best prediction is that no one really knows what will be going on in the next few months. Currently, the rates are pleasingly low. Consider the rates during the past few years. These rates are comparable or even better.

Check out the HSH Associates website. They provide historical data and rate information. It can help you with putting the mortgage rates into a different perspective. On the other hand, if you have the drive to wait for the mortgage rates to drop even further, then wait away. You must trust your own instincts and lock into a mortgage rate that you feel is the best for you.