Florida Mortgage Rates – Morning Report

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

Locking Stance: CAUTIOUSLY FLOATING    Mortgage Bonds: +19bp

Mortgage backed securities managed a nice run yesterday and pierced through that layer of resistance that has been holding them back.  Today, they are making a run at the second layer, but it is currently holding.  Remember yesterday that I said the only negative indication right now is that of the stochastic indications, which are in the overbought spectrum.  That remains the case, though now they are nearly pegged at the top of the scale and that means we are in need of a new corrective move, though exactly when it will come is the question.

Store sales continue to be mixed right now and don’t impact the mortgage bond market typically anyway.  The S&P Case-Shiller Housing Price Index (HPI) came in above expectations across the board.  The 10-city unadjusted monthly change was 0.7%, with the adjusted numbers being 0.3%, so we are seeing some strength in both numbers again.  That brings the unadjusted 10-city year/year to 4.6%.  Keep in mind that these numbers are for April and that added strength may falter after the tax credit expiration and subsequent demand drop takes hold.  Consumer Confidence certainly did not move in the same direction as last week’s Consumer Sentiment.  Consumer Confidence fell drastically to 52.9, well below expectations that it would hold at 63.3.  Much of the decline can be attributed to the Gulf oil spill, but weakness can be seen across the regions.  Consumer are showing much more concern over the job market and their income prospects.  This report is part of what is giving a nice boost to MBS prices today.  The other part is the news overseas, particularly of the European problems and adding slow Chinese growth and the subsequent stock market reaction as a result as the DJIA is now down over 200 points and below 10,000 again.

What does this mean for Florida Mortgage Rates?  Mortgage rates edged lower yesterday and are trying to continue that trend today.  The short-term outlook is turning back toward the need for mortgage rates to briefly edge higher again, so be ready to lock at a moment’s notice.  The long-term outlook remains good for stable to lower mortgage rates.

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