Mortgage rates will continue a slow drop down over the next few months. They'll drop below 5% for 30 year mortgages within 3-4 months. Had a meeting with the head of our mortgage unit Friday.

Fed meets end of this month and again in March. Look for 0.5% and 0.25% drops respectively. As summerrun said, Fed rate drops do not corrolate directly to drops in mortgage rates.

It will be a good time to refinance in a few months. If you see 30 year fixed rates hit 5%, get your application in. Better yet, get your information ready now. Go fixed rate only, no option ARM B.S.