Florida Mortgage Rate Forecast – August 11, 2010

by Florida's #1 Mortgage Planner on August 11, 2010

Locking Stance:  CAUTIOUSLY FLOATING     Mortgage Bonds:  +25bp

Mortgage backed securities had their monthly mortgage bond coupon rollover, this time adjusting minus 38 basis points.  This has no effect on rate sheet pricing, but it does skew the charts, sometimes for good, sometimes not.  Yesterday’s rollover made MBS prices look like they dropped 19bp when in fact they were up 19bp.  For the next day or two, it is more difficult to forecast due to the inaccurate presentation of the charts, however, the trend remains solidly in place at the moment.

Several things are causing MBS prices to rise this morning, including the digested Fed Policy Statement and other Fed comments.  Overall, traders do not like what the Fed had to say about the economic recovery and know that may have even painted a “rosier” picture to try not to spook the markets.  Global markets reacted to the Fed’s remarks as well, not to mention data coming in from China and the Bank of England, and as a result we are seeing a global selloff in equities.  The Nikki was down 2.7%, though China was up 0.47%.  European stocks, however, are all down, averaging around –2.0%.  The Dow is rebounding from its lows, but it remains down over 1.5% at this time.

There is not much in the way of market moving data, but we do have some things to look at.  MBA Purchase Applications showed Purchase Applications rose 0.3%, certainly nothing to get excited about.  Refinance Applications rose 0.6% despite the record low mortgage rates.  The International Trade Report showed the Trade Balance Level rose unexpectedly to $-49.9B while exports fell 1.3% and imports rose 3.0%.  Nonoil imports continue to rise sharply, up 4.7% after last report’s 6.1% spike, indicating that the trade gap was primarily nonoil.  Overall, the report was negative for the economy and that is good for MBS prices and mortgage rates.  This afternoon will see the auction results of the 10-year Treasury Note.  Yesterday’s 3-year T-Note saw decent results but there was some concerns due to soft buyside demand.  This afternoon’s auction should go well, especially with the current negativity surrounding the economy and that may boost MBS prices further.

What does this mean for Florida Mortgage Rates?  Mortgage rates are edging lower, continuing what they started yesterday after the FOMC release.  The overall outlook remains favorable for low mortgage rates,even setting new record lows after today. 

Leave a Comment

Previous post:

Next post: