Locking Stance: CAUTIOUSLY FLOATING Mortgage Bonds: +16bp
Yesterday was another interesting day if you follow some of these rate alert services (those of you whom are mortgage professionals). If you followed some the alerts from one company, they issued a lock, followed by a trend reversal and a float alert. And these guys are supposed to be experts? One good thing is that I am getting ticked off at their incompetence and starting to post these update in more websites, beginning next week with a consumer only focus at Mortgage Myth Busters. Yes, I am a member of that group, which was launched to protect the consumer from all of the BS out there, hence the reason for my posting there as well.
Yesterday saw another see-saw day with no real direction, a movement which will likely continue. The benefit to this “ride” is that MBS prices are towards the bottom side of their sideways trading pattern and riding their 10-day moving average higher in an ascending triangle formation. The key thing is that the trading range that MBS prices are trapped in is shrinking quickly and a breakout will need to occur, maybe today, but certainly before the end of the week. There are some concerns, but yesterday’s 2-year Treasury Note auction went well overall and signals continued strength in “safety” investments. There remains a great deal of uncertainty as can be seen in the charts, such as the fact we had 3 dojis out of the last 4 trading days.
We are currently higher today and inching up slightly as this report is written, now up 16bp. Most of that is due to stocks weakening, maybe simply profit-taking, or maybe due to data this morning. MBA Purchase Applications showed a slight rebound (2.0%) in Purchase Applications, which was mentioned in the weekly radio show. Also mentioned in the show and seen in the report, Refinance Applications fell 5.9% as mortgage rates did edge ever so slightly higher. The big report for today was the Durable Goods Orders which came in at –1.0%, well below the 1.0% expected. Removing transportation and we still saw a drop of –0.6%. Overall the report was mixed, though net negative. Crude Inventories will be released shortly and may have an impact. This afternoon will see the 5-year Treasury Note auction which will be watched closely, followed by the Beige Book which will likely have more of an impact than normal due to Bernanke’s recent comments. It could get interesting later on, good or bad.
What does this mean for Florida Mortgage Rates? Mortgage rates continue to drift lower, possibly on their way to test the recent record low mortgage rates. Can they go lower? Maybe, though their remain some concerns. Overall, at this point we continue to see a favorable outlook for low mortgage rates.
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Florida Mortgage Rate Forecast – July 29, 2010
by Florida's #1 Mortgage Planner on July 29, 2010
Locking Stance: CAUTIOUSLY FLOATING Mortgage Bonds: +12bp
Mortgage backed securities mounted a pretty good rally as the 5-year Treasury Note Auction went well and the Beige Book was released. All that comes in continues to favor the “flight to safety” and that bodes well for continued low mortgage rates. However, MBS prices ended they day beaten back to just below resistance.
Starting today off, MBS prices were down and looked like they were to remain trapped in a sideways pattern, but things change in this market, and sometimes very quickly. Currently MBS prices are pushing higher and are back above resistance. If they can hold above resistance, we will be setting new recent record low mortgage rates. Jobless Claims came in at 457K, pretty much in line with expectations of 460K, with its 4-week moving average dipping a bit to 452.5K. Still to come this afternoon is the last of the Treasury Auctions, the 7-year T-Note, due out at 1:00. If this auction follows the others with decent results, MBS Prices could hold their ground, even make up some more. The caution right now is that the resistance levels they are currently breaking above have managed to hold them back six times already.
What does this mean for Florida Mortgage Rates? Mortgage rates continue to hold steady, if not edge lower, and the outlook continues to be favorable for low mortgage rates. If things change, we will post accordingly, but enjoy the ride for now.
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