I am a regular participant in the Bankrate.com Mortgage Rate Trend survey and this week's survey is now available.

As a reminder:

1. The survey is for conforming loans only.
2. You're welcome to email me about your pending plans to purchase or refinance.
3. I twitter market updates a few times daily.  Follow me, if you want.

Anyway, on to the group's predictions for the next 30 days:

• 21% of participants predict rates will increase
• 43% of participants predict rates will decrease
• 36% of participants predict rates will remain unchanged

I am predicting that rates will decrease over the next 30 days, but that doesn't mean you should necessarily follow my advice when choosing whether to lock a rate, or float it.  My advice may not be appropriate for your individual situation.

From the Bankrate.com survey:

"So long as growth stays steady, money should flow into the mortgage bond market. This drops rates."

I've been using Twitter to communicate the mid-day market shifts to clients.  My tweets tell them when rates are likely to change so they can be more pro-active about their finances. 

Twitter's simple to set up and it's non-intrusive.  You're welcome to follow me if you'd like the updates, too.

The trend is still holding, so to hammer the point home: to know what mortgage rates are doing lately, just check the stock market.

• As stocks go down, mortgage rates go down
• As stocks go up, mortgage rates go up

This is not a long-term, direct relationship by any means but it's holding true this week. 

The interplay between stocks and mortgage rates is a welcome development for home buyers because it's simpler for laypersons to follow the stock market than it is to follow the mortgage-backed securities market.  When you know what to expect with rates, after all, the mortgage shopping "experience" can be a little bit less stressful.

So, enjoy it while you can -- by next week, we could back to watching esoteric data like Balance of Trade figures.

(Image courtesy: Google Finance)

If you spend time researching mortgage rates online, you'll eventually trip onto one of the following Web sites that tout "national rates" for mortgage borrowers:

• Freddie Mac's Weekly Mortgage Rates
• Bankrate.com's National Overnight Average
• HSH's Mortgage Rate Survey

Unfortunately, none of the rates quoted on these sites are especially helpful to mortgage-shopping Americans.  If you're looking for an actual mortgage rate quote, you're going to have to speak with a loan officer, or use on an online mortgage approval system to get one.

Mortgage rate surveys don't help rate shoppers because getting an accurate quote is like buying a suit -- there's two parts to the process:

1. The "base rate" of the mortgage is the suit you buy off-the-rack
2. The "adjustments" to the mortgage are the tailoring of the suit to your needs

As for determining the base rate, it is what it is.  Wall Street sets it and we all have to make like the dude.  Adjustments, on the other hand, are a different story. 

Mortgage lenders make adjustments to base mortgage rates for all sorts of things.  Some you're probably aware of, but most you probably aren't:

• How big (or small) is your loan size? 
• What is your credit score?
• What is your property type?
• What is your specific loan-to-value?
• Are you paying PMI or having the lender pay it?

And, perhaps the most overlooked reason for adjustment: In what state do you live?

Because of these adjustments to the "base mortgage rate", we can pretty certain that "going rate" mortgage surveys are nothing, if not incomplete.  A borrower's true rate is not going to be reflected at the Freddie Mac Web site, or on Bankrate.com, or anywhere else -- it's only going to come from a mortgage lender that has asked specific mortgage-related questions.

Heck, the sites aren't even good for a "ballpark rate" anymore because loan-level pricing adjustments made that impossible. 

The best use of mortgage rate surveys is to help rate shoppers get a feel for overall mortgage rate movement over time -- are rates generally moving higher, or lower, or staying flat? 

Otherwise, they're quotes out of context.

(Image courtesy: Freddie Mac)

Home buyers and other people in the market for a new mortgage should be thanking the Fed right now.

In its post-meeting press release last week, the Federal Open Market Commitee made a few choice statements about the economy that helped mortgage rates fall for the first time in 6 weeks.

The first Fed remark was that inflation appears to slowing and that it should be under control within 6-9 months. Comments like this are good for mortgage rates because inflation causes mortgage rates to rise.

The absence of inflation, it's worth noting, tends to help mortgage rates fall.

Then, the Fed also said that economic growth should stay steady this year because the full impact of its prior rate cuts have yet to work its way through the economy. 

This, too, is good for mortgage rates because economic growth is good for the U.S. dollar and a strong dollar tends to be good for mortgage rates.

But the Fed observation that made the biggest impact on mortgage rates was where the Fed noted how the credit markets are still under considerable stress.  This comment, coupled with a high-profile downgrade of the nation's largest banks, helped sparked a major sell-off in stocks Thursday and Friday. 

And last week -- unlike from every other sell-off in the last 5 months -- a fair chunk of the cash borne from the stock market exodus found its way into the mortgage bond market.

The greater demand for mortgage bonds led to lower mortgage rates on conforming home loans and this would have never happened if the Fed hadn't set the table for a mortgage bond market recovery.

This week, therefore, as the stock market goes, so should mortgage rates. 

If stocks are up, rates should be up.  If stocks are down, rates should be down.  This is happening because -- at least for now -- the mortgage bond market is serving as a safe haven from Corporate America.

And that's because the Federal Reserve made it that way.

(Images courtesy: Wall Street Journal, 80sTees.com)