Florida Mortgage Rates – Morning Report

by Florida's #1 Mortgage Planner on June 30, 2010

Locking Stance: LOCKING    Mortgage Bonds: –19bp

I hope you had a chance to listen to yesterday’s radio show.  If not, you can click to listen to it over in the right sidebar.  If you already listened to it, you know that had a very itchy finger on the lock trigger, which I repeated several times during that show.  Overall, MBS prices showed the beginning of weakness yesterday and that a new corrective period may be about to begin, which it is looking like started today.

Data this morning started with the MBA Purchase Applications report which showed that Purchase Applications are still dropping, this time –3.3%.  Apparently there are still some people in a position (or not) to refinance as Refinance Applications rose 12.6%.  The good news is that the ADP Employment Report is forecasting only 13,000 in private payrolls, indicating a miss lower is expected in this Friday’s Jobs Jamboree.  That is good for MBS prices and lower mortgage rates, but of course it is not very good for the economy.  Hey, but don’t worry, Barack Obama and Ben Bernanke say the economy is improving and will continue to do so, so the data must be wrong, right?  Chicago PMI came in just below expectations with a 59.1 versus 59.7 reported.  The economy is still improving according to the report, but at a snail’s pace versus moderate, and it is slowing.

We have some Feds talking today with Chicago Federal Reserve President Charles Evans showing up on CNBC, Governor Elizabeth A. Duke (FOMC Voting Member)abeth Duke speaking at Ohio Bankers Day on “Fostering A Healthy Credit Environment”, and the upcoming Atlanta Federal Reserve Bank President Dennis Lockhart speech on the economic outlook to the Rotary Club of Baton Rouge (Louisiana).  Ms. Duke talked about banks and credit conditions and here are some highlights of note from her speech…

“In response to questions in the Federal Reserve’s survey of senior loan officers, banks have continued to report weaker borrower demand for mortgages and for consumer loans. But demand for business loans may be improving.”

“In light of the improved economic outlook, fewer lenders are tightening loan standards. And business spending for equipment and software continues to improve, which should ultimately lead to more demand for bank credit. As economic activity picks up and importantly, the economic outlook brightens, I would expect both the supply of credit and the demand for credit to improve. “

Overall, stocks are bouncing off support and MBS prices are pulling back from resistance.  As I mentioned yesterday, stochastic indications were showing a need for another corrective move, which appears to be underway.  While it is too early to tell by any means, with more data coming our way and a suspected favorable miss in the Jobs Report, we could see the pullback and new leg upward happen this week.  Of course, we could also see a pullback and a trend reversal as well if the ADP prediction is wrong, which it has been before.

What does this mean for Florida Mortgage Rates? Mortgage rates are edging higher as expected and the next day or so will likely see the same.  The overall outlook currently remains good, but some concerns remain.  The next few days will either see lower mortgage rates or a full trend reversal.

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