Florida Mortgage Rate Forecast – July 30, 2010

by Florida's #1 Mortgage Planner on July 30, 2010

Locking Stance:  CAUTIOUSLY FLOATING    Mortgage Bonds:  +19bp

First, let’s clarify the stance.  If you are approaching your closing, go ahead and lock your gains in as a correction may be beginning as we hit new resistance.  If you have a while, we may yet see new recent record low mortgage rates as we are seeing right now.  Yes, those whom thought mortgage rates could not go any lower were wrong.  That being said, all good things do come to an end, so be ready when it does and that point may be closer than you think.

Today was the big data day and coming on the heels of a not-so-good 7-year Treasury Note Auction yesterday, it is not overly surprising to see what is happening right now.  GDP came in reasonably well, though slightly worse than expected and still lower than the last report.  Real GDP was reported at 2.4% and the GDP Price Index (inflationary measure) was at 1.8%, well above expectations of 1.0%.  There were a lot of revisions going back three years which made it look worse.  Overall, this report was mixed with some negative momentum on the economy (good), but rising inflationary pressures (bad).  Adding to the inflationary pressures was the Employment Cost Index coming in at 0.5%.  While down slightly from last report, it was above expectations and the year/year ticked higher to 1.8%.  Not a real big deal, but we need to keep an eye on it.  Chicago PMI through everyone a curveball, coming in at 62.3, above expectations of 56.0 and higher than the last report of 59.1.  This report was the opposite of what was expected and certainly not good for keeping low mortgage rates.  Also coming in unfavorably for MBS prices was Consumer Sentiment, which was reported at 67.8, above expectations of 67.0, though it still leaves the consumer’s participation in the recovery in question.

Technical analysis will be discussed in Monday’s radio show (11:00 ET), and is one you don’t want to miss.  Short-term is turning toward a need for a corrective move, which makes sense, while the long-term is working on setting up a new uptrend.  Can mortgage rates go lower?  Tune in to the show to find out, and spread the word to your buddies to listen in as well, even participate in the show by calling in or joining in chat.

What does this mean for Florida Mortgage Rates?  Mortgage rates have edged to new recent record lows, but the short-term outlook is changing.  The long-term outlook remains favorable and after a corrective period, mortgage rates may go even lower.

On a side note, you just have to laugh at this comment that was put out at closing yesterday…

“It pays to be patient and continue floating”

While it is a true statement, these same gurus issued 3 (three) lock alerts last week, costing consumers and/or mortgage professionals whose clients could have waited until now.  The exact amount depends on the loan size, etc., but these “experts” certainly cost tens of thousands of dollars in unnecessary expenses (losses) overall.  How much did you lose by following their advice?  It goes back to the bottom line thinking that you cannot rely on just one source and make sure you are getting your info from genuine experts with a proven track record if you don’t take the time to learn how to do it yourself.  To address the latter group, I am getting back to work on a book and/or course to teach you exactly how to do it and beat the experts at their own game.

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