Florida Mortgage Rate Forecast – July 22, 2010

by Florida's #1 Mortgage Planner on July 22, 2010

Locking Stance: CAUTIOUSLY FLOATING    Mortgage Bonds:  -9bp

Once again, those mortgage rate alert services that sent out lock alerts on Monday were wrong as MBS prices, and thus mortgage rates, went even lower and set new highs yesterday.  It is funny that these same people attack services like this one which are free yet this one likely has a higher accuracy rate and understands the market even better than their own.  Makes you wonder sometimes, but if you are a mortgage professional, it pays to follow more than one service and get a different perspective, rather than limiting yourself to a one-sided story.  That is especially true if you do not understand the charts and how to predict where mortgage rates are going beyond this very second or you will get caught with your pants down acting on false alerts like Monday’s.  Just our opinion.

OK, keeping in tune with our “reality check” theme for the day, let’s look at today’s data and upcoming events.  MBS prices are down because stocks are in rally mode.  Why?  Certainly it is not due to the Jobless Claims numbers which came in at 464K, above expectations of 450K and that turns the 4-week moving average back upward, now at 456K.  The key note in this report is that the Labor Department finally confessed that the prior numbers were held down because of the July 4th weekend.  Additionally, you likely heard Ben Bernanke is finally not trying to distort reality, rather saying that he has no clue what the economy is doing or will do.  OK, he didn’t put it exactly like that, but that is a pretty good summation of it.  Interestingly enough, we are seeing some Democrats beginning to revolt from the Obama Administration’s tax everything strategy as they are saying that the tax cuts the Bush Administration put in place should not be allowed to expire at the end of this year.  The good news, Existing Home Sales was not as bad as expected, but it is still down, so keep that in mind.  OH, and Leading Indicators came in inline with expectations at –0.2%.  The Treasury Department just announced the amounts of next week’s auctions of the 2-year, 5-year and 7-year T-notes.  Also, Bernanke is saying that the Fed needs to decide the fate of Fannie and Freddie Mac soon. 

What does this mean for Florida Mortgage Rates?  Low mortgage rates appear to be holding, though an edge slightly higher short-term can be expected.  Overall, the outlook looks good for steady to improving mortgage rates at this time, though this market could bring change quickly.

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