Mortgage rates may fall again

Mortgage window shopping: Fidelity: "Mortgage window shopping
BY Amy Hoak, MarketWatch
Rates have been volatile, but get ready -- they may fall again.

Copyright © 2009 Dow Jones & Company, Inc. All Rights Reserved.
MarketWatch — 06/18/09 CHICAGO (MarketWatch)
After a recent spike seen in mortgage rates, some consumers are wondering whether they've missed their chance to refinance into an ultra-low rate.
Fear not: While the conforming 30-year fixed-rate mortgage hit a daily average of 5.81% last Thursday, it averaged 5.53% on Tuesday, said Keith Gumbinger, vice president of HSH Associates, a publisher of consumer loan information. And it's possible that rates could continue to fall.

'Predicting interest rates is like predicting who is going to win the World Series in January,' said Guy Cecala, publisher of Inside Mortgage Finance. That said, he calls the recent spike 'somewhat of an aberration,' and expects rates will continue to drift down.
Why the recent run-up in rates? Over the past month or two, 'the economic skies have brightened somewhat,' Gumbinger said in an email, and the threat of 'trillion-dollar budget deficits for the foreseeable future, the potential for significant inflation, and few clues as to how the government might extricate itself from intrusions into markets' created a landscape that was not appealing to investors.

But now, rates are retreating partly because inflation doesn't seem as immediate a threat as investors feared, Cecala said. In his opinion, nothing fundamentally has changed in the economy over recent weeks to warrant the rate rise, yet he expects volatility through the remainder of the year as investors debate the economy's health. ..."