Florida Mortgage Rates – Morning Report

by Florida's #1 Mortgage Planner on August 12, 2009

Locking Stance: LOCKING    Mortgage Bonds: +12bp

Mortgage backed securities finished the day up 34 basis points, though with the monthly coupon rollover, the charts showed a 3 basis point loss (adjustment of –37 basis points).  This will skew the outlook somewhat based solely on technical indications for today and maybe the remainder of the week, but it remains apparent that MBS pricing lacks the strength to improve significantly at the moment.

Today is “FED DAY”, the day the FOMC Meeting releases their latest decision on changes to the Fed Funds Rate.  Don’t get caught up in the hype surrounding the Fed actions because it doesn’t really matter for mortgage rates.  Instead, focus on the Fed Policy Statement which is released at the same time and has a much greater impact on mortgage rates.  All this fun begins at 2:15 when the press releases go out.

As for other data today, MBA Purchase Applications were released early this morning and showed purchase applications rose a whopping 1.1% while refinance applications dropped 7.2% as mortgage rates rose to 5.38%.  The International Trade report was also released today and showed that the Trade Balance Level (aka Balance of Trade) was slightly better than the consensus, coming in at $-27.0B versus $-28.5B and most of the drop from last month was due to higher oil prices, so not bad overall.  With the US Dollar in a steady decline (getting weaker), manufacturers of exports are seeing a boost but domestic demand remains in question.  Crude Inventories will be released at 10:30, but don’t expect much market action before the FOMC Meeting press releases this afternoon.

What does this mean for Florida Mortgage Rates?  Mortgage rates will likely hold steady at least until this afternoon.  The outlook remains most favorable for higher mortgage rates.

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