Even the federal government and all governments in the major world economies are bailing out their ailing financial companies it won't be enough as we can see right now. Thus it is very hard to make mortgage rates predictions. Mortgage and the housing industry is in uncharted territory. You can make your own projections or predictions as to where the mortgage rates are going but still won't make sense a few weeks or months from now. Mortgage rates predictions are one of the hardest things to predict especially with the conflicting signals the economist are seeing.
Government intervention has made our traditional mortgage rate forecasters like newbies in this new era of mortgages and rate projections. It is extremely difficult to predict where interest rates are going. People made a living trying to predict where interest rate will go but nowadays it's the same as it used to be. The models and the basis for calculations are no longer applicable as government intervention and bail outs played a role in determining the outcome of rates.
For instance the financial giants Fannie Mae and Freddie Mac which are publicly owned financial companies; both companies work behind the scenes in the mortgage industry. They buy and package home loans and then sell them to investors in Wall Street and around the world. But the thing with these two companies is that you cannot buy directly from them. They only buy from mortgage originating banks and lenders. This was a great idea because by buying the loans they free up money for lenders to write more mortgage and more homebuyers into homes. It's like the merry go round of circle of loans.
These two financial giants own or insure almost half of the nation's total which around five trillion dollars. Because of this the whole world is watching them very carefully as to how they will manage through rough economic times. And more than ever the US government is closely watching them. Most US government experts and leaders believe that these two behemoths will soon collapse or is bound for failure. So the government stepped in and save what could have brought more economic and financial trouble to the US and the rest of the world.
But as you can see, even with the intervention and bail outs being done by the US and government and other countries doing the same, mortgage rates are still falling. Because of these bail outs and government interventions, it artificially looks good for the buyers because you can so many homes for sale and are cheap. Some even juice it up by giving a lot of incentives. But some people are still worried they may not last very long.
I do not blame those people who worried about buying cheap house for sale right now. The mortgage and housing industry is in uncharted territory. Never that these kind of things happen to the financial sector and al the experts are scrambling to find solutions and ways of making the right mortgage rates predictions. To make mortgage rates predictions now is like playing the Russian roulette. No one has the right answer because there is established pattern of how the markets and interest rates will go.
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