Florida Mortgage Rates – Morning Report

by Florida's #1 Mortgage Planner on March 29, 2010

Locking Stance: CAUTIOUSLY FLOATING    Mortgage Bonds: +3bp

Mortgage backed securities are still licking their wounds from last week and are working on a corrective move still.  A solid retracement will bring them back to around their 10-day moving average, though they do not need to get that high before turning lower again.  This time period will offer a brief chance to obtain a slightly better mortgage rate than what is currently offered, but be very careful should you decide to float.

Today’s data plays were all wrapped in the Personal Income and Outlays report, with the Fed’s favorite gauge on inflation being included, the Personal Consumption Expenditures Index, or PCE.  Core PCE (and the headline PCE) was reported at 0.0%, below expectations of 0.1%.  While that number looks good, the year/year rate rose to 2.0%, the top end of the Fed’s target range of 1.5-2.0%.  That is likely why MBS prices are not mounting a rally at the moment to complete the correction.  Consumer Spending was reported at 0.3%, inline with expectations, and 3.4% year/year.  Personal Income was reported at 0.0%, just below expectations of 0.1%, and at 2.0% year/year.  Overall, the report was generally unfavorable for MBS prices.  At 11:30, we will see the results of the weekly short-term Treasury Auctions, which may have an effect on mortgage backed securities as well.

What does this mean for Mortgage Rates?  Mortgage rates will likely hold steady or even edge lower in the next day or so, but the overall trend is for higher mortgage rates for the foreseeable future.  Exercise extreme caution should you decide to float.

(Note:  The weekly reports are still available over at Lenderama as I resumed posting there last week.  In the future, a consumer version will likely be available here as well.)

Leave a Comment

Previous post:

Next post: