As the first quarter of 2011 inches closer to a close, there is some speculation about what will happen with mortgage rates during the last segment of this three-month period. Will rates continue the trend of the last two weeks in February, posting slight decreases in the average fixed rates for both fifteen and thirty-year mortgages? Or will the decrease reverse, allowing rates to once again move over the five percent mark before April arrives?

Inflation and Jobs Key

One school of thought holds that the unemployment rate plays a role in where rates will move in the short-term. Simply put, if more people are back to work, then more consumers are likely to go house hunting. At the same time, increased economic activity could also lead to more inflation. Should this chain of events take place, there is a good chance that mortgage rates will follow a similar pattern, edging upward a little each week.

There is also some potential for the opposite to occur. If unemployment remains more or less the same, there is a good chance that inflation will also remain comparatively stagnant during the period. This in turn means consumer spending will not move appreciably, and mortgage rates will likely fluctuate up or down with very little difference from today’s rates. In order to determine what is likely to happen, consumers can monitor the situation with jobs and the cost of essential goods to get an idea of what is likely to happen with mortgage rates in the near future. From there, it will be easier to decide if now is the time to move forward with a mortgage application, or if it would be better to wait until the upcoming quarter.