Florida Mortgage Rate Forecast – August 6, 2010

by Florida's #1 Mortgage Planner on August 6, 2010

Locking Stance:  CAUTIOUSLY FLOATING     Mortgage Bonds:  +25bp

When we looked at the charts this week, especially the last couple of days, we told you to float into today basically because the charts forecasted a poor Jobs Jamboree and that mortgage rates would likely go lower yet.  Well, guess what happened?  Yep, they did just that because the Jobs numbers were not as good as even the lowered expectations.

Today was the Jobs Jamboree, aka the Jobs Report, aka the Employment Situation Report.  It comes out the first Friday of every month (except holidays) and really is four key reports wrapped into one.  Here are those four and what was reported today…

  Actual Consensus Prior
Nonfarm Payrolls -131,000 -87,000 -125,000
–Private Payrolls 71,000 100,000 83,000
Unemployment Rate 9.5% 9.6% 9.5%
Average Workweek 34.2 hrs 34.1 hrs 34.1 hrs
Hourly Earnings 0.2% 0.2% -0.1%

 

OK, you can see that we added a fifth one and that is Private Payrolls.  We did this because in the current environment, traders are focusing on the private sector as without decent job growth here, economic recovery is not likely sustainable.  Not only was it reported below expectations, Private Payrolls even dropped from the last report.  While expectations were for a drop overall due to Census workers being laid off, they were clearly not the only factor for the dismal numbers.  Prior months revisions also resulted in a net loss of 97,000.  There were some positives in the report, but clearly the overall viewpoint is negative for the economy and that is giving  MBS prices the catalyst needed to push through resistance.  Just how low can mortgage rates go?  Wait and see.  Also, this afternoon will see Consumer Credit, but don’t expect much change in the markets.

What does this mean for Florida Mortgage Rates?  Once again, mortgage rates are edging lower as we have been predicting even when others have been issuing lock alerts.  The short-term and long-term outlooks remain favorable for mortgage rates at least attempting to set new record lows, and may even do it.  As of right now, it looks like record low mortgage rates will be around for at least a little while longer.

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