Florida Mortgage Rate Forecast – August 12, 2010

by Florida's #1 Mortgage Planner on August 12, 2010

Locking Stance:  CAUTIOUSLY FLOATING    Mortgage Bonds:  -19bp

Mortgage backed securities are giving up some of their recent gains, but that is not unexpected.  Every move of significance, in either direction, requires a retracement, or corrective move, to maintain balance within a trend.  We just have to be aware of any signs of a trend reversal and that does not appear to be the case, at least not yet.  Again, we are still looking at skewed charts due to the monthly mortgage bond rollover, so nothing is as precise as before and will not be for a couple more trading days.

Yesterday’s 10-year T-Note auction went well as was expected due to stocks taking a beating.  The bid/cover ratio did edge lower to 3.04 (from 3.09) but that is pretty good considering the amount rose from $21B to $24B, not to mention the stop-out rate of 2.730 was 1/2 basis point below the 1:00 bid.  Additionally, buyside interest was heavy as indirect bidders took 57% of the auction, better than the 52% average.  Today will see the 30-year T-Bond auction, results coming at 1:00 ET.  But let’s not forget about today’s data. 

Data this morning was certainly not helpful for those wanting an economic recovery and begs to question tomorrow’s reports.  Jobless Claims came in at 484K, above expectations of 460K and up from last week’s 479K.  That brings the 4-week moving average up to 473.5K and no unusual factors were cited, further darkening the report for the economic recovery.  Import and Export Prices, a report which doesn’t do much for MBS prices, showed Import Prices at 0.2% month/month and Export Prices at –0.2% month/month.  The year/year changes were 4.9% and 3.9% respectively.  Overall, the report will likely deepen the concerns over deflation.

What does this mean for Florida Mortgage Rates?  Mortgage rates are edging up slightly after setting new record low mortgage rates.  The overall trend points to stable, even improving mortgage rates, at this time. 

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