Florida Mortgage Rate Forecast – August 2, 2010

by Florida's #1 Mortgage Planner on August 2, 2010

Locking Stance: CAUTIOUSLY FLOATING    Mortgage Bonds:  -16bp

Mortgage backed securities continue their fall for the most part today, but things do not look ugly, at least not yet.  Of course, just as is always the case, if you have a closing coming up very soon, you need to lock your rate.  For those that have time, locking may not be the best decision and that is what is discussed here, the reasons why.

Data started flowing in last Friday and continues this week with some heavy-hitters on their way.  In fact, today started with a heavy-hitter, the ISM Manufacturing Index which followed closely with the Chicago PMI on Friday.  The ISM Manufacturing Index came in at 55.5, above expectations of 54.0, but unlike the Chicago PMI, this report was still down slightly from the prior report.  Construction Spending was higher than reported, though still not much of an increase (0.1%).  Ben Bernanke didn’t throw any curveballs in his speech this morning, but he did say that a 100,000 monthly job gain would be inadequate to cut unemployment much.  That is an important statement since this Friday is the next Jobs Report and Wednesday is the ADP Employment Report.  That statement could weigh heavily (or be beneficial) on the markets moving forward.  The 3-month and 6-month Treasury Bill Auctions continue to see very strong results and this is key with stocks rallying significantly today. 

We are not going to get too much into technical analysis today since it was already covered on today’s radio show, so check it out.  The only thing we will point out is with the dip earlier today, nearly down to the 10-day moving average, we have potentially completed a corrective move.  MBS prices may still go lower, but unless they fall below their 10-day moving average, there really is no reason to be locking right now.

What does this mean for Florida Mortgage Rates?  Mortgage rates are edging higher at the moment and may edge slightly higher for the short-term.  However, the long-term outlook remains favorable at this point for mortgage rates edging lower again, maybe even setting new recent record low mortgage rates.

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