Locking Stance: LOCKING Mortgage Bonds: -3bp
Mortgage backed securities are all over the map today, going up and down in a very volatile session. Remember what we stated yesterday, that the corrective move has moved to a solid enough level as to allow the next leg lower to begin and that appears to be what is still being set up.
Data today covered several points, though none typical make major waves in the markets. MBA Purchase Applications started the day off by showing Purchase Applications dropped 0.4%, within the +/- 3% range we expected. Refinance Applications also dropped as we expected, down 10.8% as mortgage rates ticked higher. Certainly no surprises here and indicative of a housing market that remains on life support. The Empire State Manufacturing Survey was released and came in below estimates of 5.0 with a 4.14 reported, down from 7.10. Export Prices rose 0.8% and Import Prices rose 0.6%, bringing them both to 4.1% year/year. The underlying numbers show stable prices in finished goods with consumer goods rising 0.2% after two prior months of 0.2% declines and capital goods up 0.2% after two months of 0.1% declines. Industrial Production showed Productivity inline at 0.2% and Capacity Utilization was 74.7%, below estimates of 74.9% and down from 74.8% last report. Overall, the data should be giving a boost to MBS prices, not keeping them steady, further indicating that this recent move higher was likely no more than a necessary correction.
What does this mean for Florida Mortgage Rates? Mortgage rates are holding steady and may do so throughout the day, though volatility can be seen. The risk/reward ratio continues to be unfavorable for floating mortgage rates at this time as the outlook remains more favorable for mortgage rates to resume their rise.