Expect Mortgage Rates to Stabilize

As of the first week of November, the national average for a new 30-year fixed-rate mortgage loan was 7.90% according to HSH Associates, the Butler, NJ publisher of consumer loan rate information. This was identical to the average rate one year earlier and just above the low for the year of 7.8% reached at the end of October, but well below the 8.82% peak at the end of May. The roller-coaster ride in mortgage rates is probably over for the time being according to Keith Gumbinger, VP of HSH Associates. "This 8% range is very likely a place we'll be hanging around a lot through the next several months."

Doug Duncan, chief economist for the Mortgage Bankers Association echoes that opinion. Duncan expects the housing and mortgage business to dip slightly as the economy slows over the coming year. Originations should fall about 2% from this year's expected $1 trillion, well below 1998 and 1999 levels.