Mortgage rate predictions are made each week at Subprime Blogger.? The predictions are usually made every Monday before Freddie Mac releases the data on Thursday.

Mortgage rate predictions have been quite accurate in the last few weeks as I have correctly picked the bounce off of 4.78% and then two weeks later the reversal back to 4.82%.? I think we have seen an intermediate top in rates a few weeks ago when the Freddie Mac weekly survey reported that rates were at 4.86%.? I am sure many analysts and chart technicians feel that 5% will serve as a ceiling; I just do not see that happening.

With that being said, I think rates will continue lower next week but not by a large amount.? The Fed is still committed to purchasing mortgage backed securities but they have lightened up greatly with this commitment.? They are still going to fulfill the $1.25 trillion they intialed set out to buy, but it seems that they are going to do it in small increments rather than in large chunks.? By buying back MBS in smaller increments it means we will see gradually declines in overall rates rather than large fluctuations.

Last week’s mortgage rates came in at 4.82% which was just .01% off of my prediction of 4.83%.? This week I predict that we are going to edge even closer to that all time low that many media outlets have been talking about for months.? This week’s mortgage rate predictions are:

30 Year Fixed Rate Mortgage – 4.76%

If this were to happen, it will be very interesting to see how the national media takes it.? This would be about as close as we have come to an all time low since March and it would likely be national headline news if mortgage rates did break the all time historic record for lows.? There are sure to be many interesting perspectives that will come out of this if it does in fact happen.

Even if mortgage rates do not hit the historic low this week, it is likely that we will see it in the weeks to come.? The only reason we would see a true bottom in mortgage rates is if the housing market sees a drastic improvement.? Unfortunately that is just not the case in the current market.? Home prices are continuing to decline and we are still seeing an abnormally high number of foreclosures and short sales.

President Obama is doing everything he can come up with to make the housing market better but the economy is not helping at all.? Most major corporations are continuing to lay off workers and the economy is not getting stimulated by those who actually do have money.? It sure seems the case that those who do still have money are the ones who have always been smart with their financial decisions and saved.? It is these frugal individuals that are helping keep the economy afloat, but they are doing little to actually “stimulate” it.

The individuals that were stimulating the economy during the 1990s and early 2000s are the same ones that we would consider subprime borrowers today.? They are the ones who maxed out their credit cards and made sure that they had their hand in at least two properties.? It is now the case that this individual is broke and looking for a job.? Unfortunately, if they do not have a job, they are finding it extremely difficult to make ends meet as very few financial institutions are willing to cut them any slack because of their bad financial decisions.

It will be interesting to see if the frugal individual that has been saving from day one will actually do his or her part to stimulate the economy.? I honestly feel it is not in their blood to spend a great deal of money.? I have many friends who are this way and they will never make large purchases no matter how much money they have.? They will continue to drive the 2001 Honda Accord that they bought used.? They will continue to live in the same house even though they could afford a mortgage of at least $100,000 higher.

These particular individuals are the ones that could get amazing deals in the current economy.? As one of my best friends likes to say, “now is the best time to spend great amounts of money because everything is on sale.”? This is definitely the case as corporations are trying to do anything possible to make an extra dollar or two.? If you have been thinking about taking a vacation, this year might offer the cheapest vacations ever, even to exotic locations.? If you have thought about buying a new car or boat, this might be the year as many of these companies are going out of business.

Most activities and objects that cost over $2500 are greatly discounted in the current economy; including houses.? The excess amount of housing inventory on the market is causing prices to plummet.? If you have been considering buying a house but have been reluctant in the past; this may be the year for you to buy that house.? Many home owners that are trying to unload homes are willing to take an offer well below the listing price just to get some money out of the house.

Now that you know mortgage rates are likely to head lower, it is a great time to start zeroing in on the exact house you want.? Even if the price is not exactly what you want, you may be able to wait a few months and over a price that would be well within your means.? It is not likely homes are flying off the market left and right so make sure to be patient with your decisions.

There is an unbelievable amount of information on the internet so please do your best to educate yourself before going into the home buying process.? By doing a quick google search and looking through some mortgage blogs you will do yourself a huge favor.? It may save you $10,000 in the long run if you actually take these steps early in the purchasing process.