Florida Mortgage Rates – Midday Report

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

Locking Stance: CAUTIOUSLY FLOATING    Mortgage Bonds: +13bp

Mortgage backed securities continue to make headway, again attacking that long-term downtrend, and now their 200-day moving average.  They have broken beyond their peak just 3 days ago, and that changes the outlook.  Data today had some potential killers, but MBS prices are heading higher still.  There are some concerns, but we can’t help but hold out as the future may include lower mortgage rates.

Speaking of data, today’s GDP report came in lower than expected, but still showed a growing economy.  GDP was at 3.2% versus 3.4% and down from last report of 5.6%.  The GDP Price Index, aka Chain Deflator, came in at 0.9% versus 1.0%, but was actually higher than the last report of 0.5%, which may raise some eyebrows from inflation focused traders.  The Employment Cost Index came in at 0.6% quarter/quarter and 1.7% year/year, both slightly higher than last report also hinting to potential inflationary pressure.  Consumer Sentiment came in at 72.2, also higher than expected and up from last report, which typically pressures MBS prices lower.  Even the more important Chicago PMI was higher than expected and up from the last report, coming in at 63.8 versus 60.0 and up from 58.8.  Data was certainly not favorable overall for MBS prices, yet they are managing to make gains since stocks are falling, and nothing more.  If they can hold their gains, a new future may be on the horizon.

What does this mean for Mortgage Rates?  Mortgage rates are edging lower today and the outlook may be changing even for the long-term.  Unless a significant change occurs, I would wait at least until near the end of the day to lock as there may be lower mortgage rates on their way, though there are still some concerns.

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