Florida Mortgage Rate Forecast – August 17, 2010

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

Locking Stance:  CAUTIOUSLY FLOATING     Mortgage Bonds:  -34bp

Mortgage backed securities are heading lower today, inching below their 10-day moving average, which puts us into the “itchy trigger finger” range.  As you know, we do not like to rush into change, but we are watching very closely if MBS prices continue to fall.  With pricing only down a little more from when lenders priced today, we are holding our stance while waiting to see if the trend holds.

Housing Starts started the day off, coming in below expectations at 546K versus 565K and edging lower still from 549K.  Housing Permits also dropped, falling to 565K from 586K and showing the housing market is no where near ready to recovery.  The Producer Price Index (PPI) came in inline with expectations at 0.2% overall, bringing it to 4.1% year/year.  Core PPI was at 0.3%, above expectations of 0.1% and bringing it to 1.5% year/year.  The overall read on inflation remains subdued, but the Core inching higher does create some concerns, though still tame.  Industrial Production exceeded expectations, coming in at 1.0% versus 0.6% and Capacity Utilization followed suit with a 74.8% versus 74.5%.  Still to come is Minneapolis Federal Reserve Bank President Narayana Kocherlakota’s speech on the FOMC to a business leaders lunch at Northern Michigan University in Marquette, Michigan at 12:30.   Additionally, the government is looking to get even more involved in mortgages as if they haven’t already screwed it up enough and the Federal Reserve announced the final rules to protect mortgage borrowers from unfair, abusive, or deceptive lending practices that can arise from loan originator compensation practices.  More on that to come elsewhere.

What does this mean for Florida Mortgage Rates?  Mortgage rates are edging higher at this time, but at the moment it appears the trend remains intact.  However, there are increased concerns at this point.  Overall, the outlook remains favorable for mortgage rates holding steady or improving still, but that may be about to change.

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