Florida Mortgage Rates – Morning Report

by Florida's #1 Mortgage Planner on June 17, 2010

Locking Stance: CAUTIOUSLY FLOATING    Mortgage Bonds: +22bp

I apologize, but apparently yesterday’s post never made it online and I failed to follow up to ensure it did.  I was having some computer problems throughout the day with my relatively new laptop, which crashes nearly every day at least once.  I am not sure if it is a Dell issue, an Intel issue, or what, but needless to say it causes plenty of headaches and may find its way to the trash pile early.

OK, since the last post on Tuesday, MBS prices took a nose dive, but they also held where they should have.  It does raise concerns, but I did not see a reason to rush to lock anyone that still had time before closing.  Here is a quick overview of the data over the last couple of days…

Tuesday saw the Empire State Manufacturing Survey come in below expectations, Import and Export Prices both were lower than expected, and the Housing Market Index dropped from 22 to 17.  The end result is that the economy is not looking overly pretty.  Yesterday, MBA Purchase Applications reported a nice gain in refinances and purchases, with them being up 21.1% and 7.3% respectively.  In regards to purchases, keep in mind they have been beaten down significantly so this rise comes nowhere near where they were.  As I stated in this week’s Mortgage Market Weekly radio show (done while my laptop crashed), inflation remained relatively tame at the producer level, though Core PPI raised some concerns.  Industrial Production and Capacity Utilization were the shining stars for the economy as they both beat expectations.  And Finally Charles Plosser and Ben Bernanke were speaking yesterday, with Bernanke speaking about financial reform after the close.

OK, today is the big day as far as data goes as I mentioned before.  We have had quite a bit of data coming out, including a couple heavy-hitters.  The Consumer Price Index got us started as CPI showed inflation remained tame (just as I said before).  Overall CPI was reported at –0.2% and Core CPI was 0.1%, both inline with expectations.  Jobless Claims was next, reporting a jump to 472K along with a revision higher by 4K for the prior week.  Guess that jobs market is improving, right Mr. President?  Leading Indicators was reported at 0.4%, below expectations of 0.6% and marking another negative for the economic outlook.  And finally, and maybe the biggest impacting data play for today, was the Philadelphia Fed Survey, which was reported at just 8.0, well below expectations of 20.0.  Overall, data continues to point to a weakening economic recovery and tame inflation.  Hmm, where I have seen this before?  Oh yeah, 1932.

I went into the charts yesterday, but since that vanished, let’s hit on it real quick here.  The picture remains looking much like what I mentioned in the radio show despite the drop on Tuesday afterwards.  In fact, MBS prices have not only recovered from that drop, but are pushing ever higher right now, signaling that rush to lock was not the right call (unless you were closing in a day or two), hence I was right again while the “gurus” were panicking.  Sorry for the ego boost, but I think it is deserved as I probably saved your clients more than the cost of their services as they love to claim in their advertising.  But I digress.  OK, looking at the charts, Stochastic indications have plenty of room for upward movement and every moving average continues to make gains.  Overall, it just doesn’t look ugly at all.  That being said, it takes more gains these days to see mortgage rates edge lower, something worth keeping in mind.  Also, in the current markets, things can change very quickly.

What does this mean for Florida Mortgage Rates?  Mortgage rates are edging lower and look to attempt to set new recent record lows.  Things can change quickly, but I see no need to lock right now.

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