Florida Mortgage Rate Forecast – August 16, 2010

by Florida's #1 Mortgage Planner on August 16, 2010

Locking Stance:  CAUTIOUSLY FLOATING     Mortgage Bonds:  +9bp

Mortgage backed securities are backing down from their highs this morning and may be running out of steam after the Japanese released a weak GDP report.  Along with some data today, MBS prices rose to new heights, breaking through two layers of resistance, but are now resting just below the lower resistance layer.

This morning saw the Empire State Manufacturing Survey released which showed the General Business Conditions Index at 7.10, up from 5.08 but below expectations of 8.00.  The report poses bad news for the manufacturing outlook as new orders, unfilled orders and shipments show month to month deterioration, which may be reiterated in Thursday’s Philadelphia Fed Survey (a major report).  The Treasury International Capital report showed Foreign Demand for Long-Term US Securities increased to $44.4B from $35.4B.  The Chinese continue to disinvest at an aggressive rate with their holdings falling 2.8% to $837.7B.  The Japanese, however, are buying aggressively, raising their holdings 2.2% to $803.6B.  Overall, foreigners are buying up US Treasuries except for China.  The Housing Market Index was next up and showed a drop of one to 13, further highlighting the problems with tight credit, inaccurate appraisals and impacts from distressed properties.  Today’s short-term Treasury Auctions were very strong as demand for “safety” investments rises.

What does this mean for Florida Mortgage Rates?  Mortgage rates remain steady, if not improve and the trend is for them to continue doing so.  The overall outlook remains favorable for steady or improving mortgage rates.

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