Florida Mortgage Rates – Morning Report

by Florida's #1 Mortgage Planner on July 31, 2009

Locking Stance:  CAUTIOUSLY FLOATING    Mortgage Bonds: +16bp

Mortgage backed securities ended the day yesterday on a strong note as a result of better than expected performance of the 7-year Treasury Note Auction.  In fact, the managed to close the day above their 25-day moving average (and were up 25 basis points) and may very well be breaking the downtrend that was being set up.  With their move higher this morning, it appeared that was going to be the case, but then more reality hit and MBS pricing has since fallen again.  Mortgage backed securities pricing climbed 38 basis points this morning on the heels of favorable data and another poor earnings report, namely Chevron missing just as Exxon did yesterday.

GDP (Gross Domestic Product) was released this morning and was a needed set of good news for mortgage rates, with Real GDP missing slightly (-1.0% versus –0.7%) but with the Price Index coming in well below expectations (0.2% versus 1.3%).  The GDP Price Index, also known as GDP Chain Deflator, is a measure of inflation so any miss lower is good news for Florida Mortgage Rates.  The Employment Cost Index was also released and came in slightly higher than estimates (0.4% versus 0.3%), but annualized it has dropped to just 1.8%, the slowest rate in the past year, easing inflationary fears even more.  And the Chicago PMI, the last report of the day and the main event of the day, came in just below expectations (43.4 versus 44.0), but is higher than last month signaling the business sector is still shrinking, but not as much.

What does this all mean for Florida Mortgage Rates?  Florida Mortgage rates appear to be stabilizing and possibly moving lower as “negatives” in the charts are diminishing and favorable data is coming in.

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