Florida Mortgage Rate Forecast – August 25, 2010

by Florida's #1 Mortgage Planner on August 25, 2010

Locking Stance:  CAUTIOUSLY FLOATING     Mortgage Bonds:  +31bp

Mortgage backed securities are pushing higher this morning and, as mentioned could be a possibility in yesterday’s radio show, are breaking through resistance and virtually eliminating the concerns.  We certainly hope you didn’t fall prey to yet another false lock alert issued yesterday by at least one prominent rate alert service.

Data started off today with the weekly MBA Purchase Applications report, which showed a 0.6% increase in Purchase Applications and a 5.7% increase in Refinance Applications, neither of which are anything to et excited about.  Durable Goods Orders became the catalyst MBS prices needed to break above resistance with its dismal report.  Durable Goods Orders showed new orders at 0.3%, well below expectations of 2.5%, though it is up from –1.0% last report.  Remove transportation from the equation and we see –3.8%, which is considerably lower than the –0.6% last reported and that is where the negativity exists the most.  And following yesterday’s disappointing  Existing Home Sales, New Home Sales was worse than expected, coming in at 276K versus the 340K expected, and down from 330K last reported, a record low annual rate.  Unlike yesterday’s report though, New Home Sales showed price weakness with the median price dropping to $204,000, the lowest since 2003.  Crude Inventories is even moving the markets a bit as it was reported up 4.1M barrels and coupled with reduced hurricane worries, oil prices are falling.  Stock markets are off their lows, but MBS prices appear to be holding their ground.

A quick technical analysis update from yesterday’s radio show’s analysis.  During the show, the 4.0% FNMA mortgage bond was presented in a sideways pattern, one concern for the future of mortgage rates.  MBS prices this morning are breaking above that pattern, so a new uptrend may be underway.  Additionally, the 3.5% FNMA mortgage bond, the more appropriate chart, is now breaking above its first of two layers of resistance, erasing some concerns, though until the second layer is broken, concerns remain. 

What does this mean for Florida Mortgage Rates?  Mortgage rates are improving some today and the outlook remains favorable for steady to improving mortgage rates, maybe even setting new record low mortgage rates.

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