Florida Mortgage Rates – Morning Report

by Florida's #1 Mortgage Planner on February 2, 2009

Locking Stance: LOCKING    Mortgage Bonds: -6bp

I just got finished uploading the weekly Mortgage Market Update over at Lenderama, so you may want to go and check that out as well.  But before you go, here is what is expected today.

We already saw the Fed’s favorite gauge on inflation, the PCE report, released and the initial reaction in the markets was favorable, as it should be.  The problem is that after the dust settled, mortgage backed securities fell to become negative, begging to question exactly where mortgage rates are going.  We still have the ISM Index to go, coming at 10:00, but here is what this morning’s Personal Income and Outlays data showed…

Actual Est’d Y/Y
PCE -0.5%   0.6%
Core PCE 0.0% 0.0% 1.7%
Personal Income -0.2% -0.4% 1.4%
Consumer Spending -1.0% -0.9% 3.6%


As you can see, the Core PCE is now well within the Fed’s target zone and that will increase their concerns about deflation.  The only problem with that is that these numbers are really the results of inflation and not inflation itself.  The actions taken in today will not be seen for several months, possibly 6 months or more down the road, and that could be bad news and is keeping inflationary fears in the mix.

What does this mean for Florida Mortgage Rates?  Well, it may very well be that we are seeing the mortgage rate bubble bursting.  Despite favorable news, mortgage rates look poised to remain steady or even continue their climb.

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