Experts Split on Where Rates Heading

The majority of experts are divided as to whether the downward trend seen in long-term mortgage rates this week will continue or stabilize, according to a Bankrate survey released July 2. There are 46% of the respondents who foresee a further decline while another 46% predict stability. The remaining 8% anticipate an increase. The average rate for a 30-year conforming, fixed-rate mortgage slid to 5.32% from 5.42% in the most recent week, according to the Freddie Mac Primary Mortgage Market Survey. The move brings the average 30-year rate to about one-quarter of a percentage point below its June 11 peak, said Frank Nothaft, Freddie Mac vice president and chief economist. Mortgage researchers at Credit Suisse said in a report that they believes the 30-year rate would have to drop below 5% again "to trigger a renewed refi surge." According to Freddie Mac, the average rate for 15-year FRMs and five-year Treasury-indexed hybrid adjustables also fell during the week ending July 2. The former dropped to 4.77% from 4.87%, and the latter declined to 4.88% from 4.99%. In contrast to the other mortgage rates Freddie Mac tracks, the average rate for one-year Treasury-indexed adjustable-rate mortgages rose slightly in the most recent week to 4.94% from 4.93%. All rates tracked by Freddie were down from a year ago when the average one-year Treasury ARM rate was 5.17%, the average five-year Treasury hybrid rate was 4.99%, the average 15-year rate was 5.92% and the average 30-year rate was 6.35%. Average points were 0.6 for one-year Treasury ARMs and 0.7 for the other types of mortgage rates Freddie tracks.