Florida Mortgage Rates – Morning Report

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

Locking Stance: LOCKING    Mortgage Bonds: 0bp

Mortgage rates moved higher last week and may continue to do so this week as market forces seem intent on driving them higher as traders seek better rates of return.  The Fed continues to appear as the principal buyer and continue to fail to drive mortgage rates lower.  Adding to that fact, favorable data has been unhelpful lately as well.

As for data this week, we will have some major players, starting with this morning’s already released PCE index, the Fed’s favorite.  We will also see the ISM Index in about 20 minutes, but we can see trader’s reaction to the PCE have been good to start, then they shrugged off all the gains.

This morning’s Core PCE data came in at 0.1%, inline with expectations and the yearly rate indicated 1.6%, within the Fed’s comfort zone, but certainly not indicative of deflation.  Personal Spending came in at 0.6%, beating expectations of 0.4%.  The good news is that savings is at a 14-year high.  Personal Income, however, beat expectations by showing an increase of 0.4% versus expectations of -0.2%, raising wage-based inflation concerns as the yearly rate rose to 1.9%. 

On the technical side, we need a correction and we will likely see it this week, if not starting today.  The bigger picture remains pointing towards higher mortgage rates for the future.

What does this mean for Florida Mortgage Rates?  Continue to expect mortgage rates to hold steady or possibly tick slightly lower today.  in the longer term, however, mortgage rates still look to move higher.

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