Florida Mortgage Rates – Midday Report

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

Locking Stance: CAUTIOUSLY FLOATING    Mortgage Bonds: +3bp

Mortgage backed securities are holding above support at this point and while I would have liked to see a greater retracement, there is a good chance the pulled back enough to move higher again and are currently showing some strength.  Tomorrow is the big day, the Jobs Jamboree, which could be very favorable to MBS prices, or could shock the markets again.

Jobless Claims were released this morning and were certainly favorable to mortgage rates as the report came in at 472K, well above expectations of 450K and up from 457K the last report.  That brings the 4-week moving average up to 466.5K and heading in the wrong direction for a recovering economy.  Continuing Claims rose 43K to 4.568M, but overall is still 100K lower than mid-May though the drop may be reflective of discouraged workers.  Also, the high levels of Jobless Claims may be a result of consensus workers leaving temporary employment after qualifying but the Labor Department has not cited that as a possibility.  Also showing a weakening economic recovery was today’s ISM Manufacturing Index which came in at 56.2, well below estimates of 59.0 and down from 59.7.  Again, the economy is still growing according to the data, but it is slowing down its growth.  Construction Spending was better than expected, coming in at –0.2% and bringing its year/year to –8.0%.  Keeping inline with the housing market chaos, Pending Home Sales dropped 30.0% to 77.6, reflecting the significant drop in housing demand after the expiration of the tax credit.  The good news is the government got off their butts and passed the tax credit extension so as long as you made the April deadline to make your purchase, you have a while longer before you actually have to close and still get your tax credit.  Next up, tomorrow’s Jobs Jamboree.

What does this mean for Florida Mortgage Rates?  Mortgage rates are holding steady today and will likely do so the remainder of the day.  Here is the gamble, which may pay off…tomorrow is the Jobs Report which can improve mortgage rates, or not.  In general, odds favor lower mortgage rates, but their are some concerns.  I leave it to you to decide, but I lean towards us receiving a favorable report, hence my stance.

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