Florida Mortgage Rate Forecast – August 5, 2010

by Florida's #1 Mortgage Planner on August 5, 2010

Locking Stance:  CAUTIOUSLY FLOATING    Mortgage Bonds:  +22bp

Mortgage backed securities are trying to break resistance again this morning, currently above that level.  If they can manage to break above, and especially if they break the next one, mortgage rates will set new recent record lows.  So, can mortgage rates go lower?  They may just do it and tomorrow’s Jobs Jamboree may be the key factor.

MBS prices are up nicely right now on the heels of a dismal Jobless Claims report which is spooking the markets a bit after all of their “good news”.  Remember that Ben Bernanke said that even a 100K Jobs Report is not good enough and with yesterday’s 42K ADP Employment Report and today’s Jobless Claims, things are certainly not looking good for a jobs market recovery right now.  Jobless Claims were expected to be at 455K, a slight drop from the prior week, but instead they rose to 479K and sent the 4-week moving average back up to 458.5K.  Treasury Secretary Tim Geithner will hold a press briefing on the Social Security and Medicare Trust Fund at high noon.  The stock market opened just a while ago and they are down slightly, providing another slight boost in MBS prices.

When we look at the charts, we still have some concerns, but overall things still look good for mortgage rates holding steady or pushing even lower.  We remain solidly above the rising 10-day moving average and as we have stated for quite some time, until we drop below that level convincingly, there is no real cause for locking.  All other moving averages continue their climbs and stochastic indications are holding fairly steady at the bottom of the overbought spectrum, meaning there is room for “growth” and the pattern has not changed much for nearly a month.  That being said, we would not be surprised to see a pullback somewhat as the day goes on as we likely lack the catalyst to break resistance today with the looming Jobs Report tomorrow.

What does this mean for Florida Mortgage Rates?  Mortgage rates continue to edge slightly lower at this point and the overall outlook remains favorable, though some concerns remain.  Where mortgage rates will go from here will likely be decided tomorrow with the release of the monthly Jobs Report.

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