Florida Mortgage Rate Forecast – July 21, 2010

by Florida's #1 Mortgage Planner on July 21, 2010

Locking Stance: CAUTIOUSLY FLOATING    Mortgage Bonds:  +16bp

Mortgage backed securities gave up all of their gains and ended flat (0bp change) when stocks managed to rebound from their losses, even posting a slight gain.  Today, MBS prices are rolling along the same as yesterday, again following stocks’ lead.  Just as mentioned in yesterday’s radio show, there does not appear to be any genuine reason to change stances and yesterday’s knee-jerk rate lock alert from alert services may have been an incorrect alert, again.  Time will tell for sure, but so long as MBS prices hold above their 10-day moving average we should see low mortgage rates.

Data remains scarce today with only the weekly MBA Purchase Applications and Crude Inventories reports.  MBA Purchase Applications showed a 3.4% gain in purchase applications essentially covering just last week’s 3.1% loss and certainly no reason to get joyous yet.  Refinance applications registered a 8.6% gain as mortgage rates remain low and homeowners try and qualify and close at these low mortgage rates.  Crude Inventories will be released in just a few minutes.  Federal Reserve Chairman Ben Bernanke will be testifying before the Senate Committee on Banking, Housing, and Urban Affairs, U.S. Senate for the Semiannual Monetary Policy Report to the Congress this afternoon (2:00), which could affect the markets.

Looking at the charts, they remain much like described in yesterday’s radio show, with MBS prices having pulled back Monday in what appears to be a corrective move, though there are some concerns.  Stochastic indications have moved out of the overbought spectrum and allow for rebounds in MBS prices, though they are currently not showing that to begin yet.  The 10-day moving average has flattened out somewhat, but every other moving average continues there climb.  Once again, the charts are not currently pointing to a trend reversal which means we should see mortgage rates edge lower again soon.

What does this mean for Florida Mortgage Rates?  Mortgage rates are again trying to edge lower today and the outlook currently favors steady to improving mortgage rates at this point.  There are some concerns, but unless mortgage rates edge higher still, we see no need to change stance.

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