MORTGAGE RATE FORECAST FOR APRIL 2008

(courtesy of huliq)

In the beginning of March, mortgage rates for a 30 year fixed rate mortgage averaged 6.13 percent. Throughout the month mortgage rates slightly increased before the Feds lowered interest rates in the middle of the month and rates began to fall for the first time since February which helped the 30 year fixed rate mortgage average5.83 percent at the end of the month.

During the month of April the Bush administration is expected to pass a mortgage aid package program that would benefit homeowners and lenders alike. The program is based on home equity, allowing lenders to refinance homeowners who owe more than the homes value for what the property is currently valued at in exchange for the financial backing of the federal government on the forgiven equity.

If the mortgage aid package is enacted upon early enough this month it could push mortgage rates down up to a quarter of a percent by mid month. Accompany this with the possibilities of another rate cut by the Federal Reserve towards the end of the month and you might see mortgage rates falling slightly under 5.50 percent for a 30 year fixed.

April is also when single family homes begin to pick up a head of steam for a lot of cold weathered states around the country. Homebuyers are still skeptical about home values which have lead to a lot of “bargain hunters” making offers well below the asking price. Although this data likely will not affect April’s mortgage rates, it may be a month where we begin to see home values finding their equilibrium.

Barring any major crisis throughout the month, 30 year fixed mortgage rates for the month of April should average anywhere between 5.625 percent and 5.75 percent, with the high at 6 percent and a low at 5.45 percent.