Florida Mortgage Rates – Morning Report

by Florida's #1 Mortgage Planner on July 2, 2010

Locking Stance: LOCKING   Mortgage Bonds: -6bp

Mortgage backed securities are trading just below the flat mark after volatility erupted this morning after the release of the Jobs Jamboree.  At this point, chances are MBS prices won’t move a lot as traders start focusing on the extended holiday weekend and the fact the markets will be closed on Monday, but they are displaying weakness which is a serious concern.

As you are already well aware of, the monthly Employment Situation report was released this morning, aka the Jobs Jamboree.  Nonfarm Payrolls came in at –125,000, essentially inline with estimates, but down considerably from last month’s 431,000.  The numbers these reports offered are somewhat skewed with the temporary census workers coming and going, so let’s look at just Private Payrolls.  Private Payrolls came in at 83,000, below estimates of 105,000 but were higher than last reported (41,000).  The Unemployment Rate dropped to 9.5%, but that was due to a sharp drop in the labor force, not job creation.  Average Hourly Earnings was reported at –0.1%, below estimates of 0.1%, which is good for MBS prices.  The Average Work Week dropped to 34.1 hours while expectations were for them to remain at 34.2 hours.  Overall, the numbers favor MBS prices and lower mortgage rates so the  lack of rise in MBS prices is a bit concerning though we can likely float into next week so long as nothing dramatic happens during the remainder of the day.

What does this mean for Florida Mortgage Rates?  The outlook has become uncertain with the lack of movement today, but the charts still are favorable. The short-term appears to point to mortgage rates edging higher, however that may be due solely to the approaching holiday weekend.  The long-term outlook is still favorable for steady mortgage rates, possibly even improving, though that may be undergoing change as well.

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