Florida Mortgage Interest Rate Watch

This site will provide frequent updates on changes in interest rates on Florida Mortgages and the reasoning behind either locking your rate, or floating the rate on your new Florida home loan until a later date.  This information is strictly my opinion, based on changes in the different financial markets, and the opinions and feelings of various economists and financial experts.  No guarantee or warranty is given or implied that this advice is correct, since no one can predict the future, but all care is taken to insure that the advice given here is as valid as possible.  Use of this information to make any decision on whether or not to lock the rate on your new Florida mortgage is strictly at your own risk.

I hope you find this information useful.

Florida Rate Watch

Tuesday’s bond market opened in negative territory following the release of mixed inflation news, but like yesterday, has since recovered those losses. Also contributing to the rebound in bonds are losses in stocks. The stock markets are reacting negatively with the Dow down 80 points and the Nasdaq down 6 points. The bond market is currently down 2/32, which will likely push this morning’s mortgage rates higher by approximately .125 of a discount point or more.

The Labor Department gave us this morning’s big news with the release of July’s Producer Price Index (PPI). They reported a 0.6% rise in the overall reading that was much higher than the 0.1%-0.2% that was expected. The good news came in the core data reading that rose 0.1% when it was expected to increase 0.2%. This means that overall prices rose more than expected at the producer level of the economy. However, if more volatile food and energy prices were excluded, prices rose less than expected. This eases some inflation concerns and helped prevent mortgage rates from spiking even higher.

Also posted this morning was June’s Goods and Services Trade Balance data. It revealed that the U.S. trade deficit stood at $58.1 billion in June. This was much lower than expected. But, this report usually is not much of an influence on bonds or mortgage rates, and did appear to effect pricing.

There are two reports scheduled for release tomorrow. The more important of them is July’s Consumer Price Index (CPI) at 8:30 AM. The CPI is one of the most important reports we see each month. It measures inflation at the consumer level of the economy.  Smaller than expected increases should lead to a bond rally and lower mortgage rates. But if we see stronger than expected readings, mortgage pricing will likely move higher tomorrow.

At 9:15 AM tomorrow, Industrial Production data for July will be posted. This report gives us a measurement of manufacturing sector strength by tracking output at U.S. factories, mines and utilities.  It is considered to be of fairly high importance and may cause movement in mortgage rates.  Analysts are currently expecting to see a 0.3% increase in production.  A higher level of output could lead to higher mortgage rates tomorrow, while a weaker than expected figure should help push rates slightlylower, perhaps making up for today’s gains.
If you are considering financing or refinancing a home, I suggest

• Float if my closing was taking place within 7 days
• Float if my closing was taking place between 8 and 20 days
• Float if my closing was taking place between 21 and 60 days
• Float if my closing was taking place over 60 days from now

This is only my opinion of what I would do if I were financing a home, and cannot be guaranteed to be in the best interest of all other borrowers.

This week brings us six pieces of economic data for the bond market to consider. The first is July’s Retail Sales report early tomorrow morning. This data is very important to the financial markets and mortgage rates because it helps us measure consumer spending. Since consumer spending makes up two-thirds of the U.S. economy, any data related to it can cause a fair amount of movement in the markets. A smaller than expected increase would indicate that consumers are spending less than previously thought, potentially slowing the economy. This is good news for the bond market and mortgage rates as it eases inflation concerns and makes long-term securities such as mortgage-related bonds more attractive to investors. Current forecasts are calling for an increase of 0.2%, so a number less than this should cause a minor drop in 30 year fixed rates

The next report is scheduled for release early Tuesday morning with the release of July’s Producer Price Index (PPI). This index is considered to be an indicator of inflation at the producer level of the economy. There are two measures in the report- the core data and the overall index reading. The core data is more important because it excludes the traditionally more volatile food and energy prices that can change significantly from month to month. Current forecasts call for an increase of 0.1% in the overall and 0.2% in the core data. A larger increase may raise inflation concerns and push mortgage rates higher Tuesday morning. If this report reveals a smaller than expected increase, we could see mortgage rates improve as a result.

There are two reports due to be posted Wednesday. The most important of the three is July’s Consumer Price Index (CPI) at 8:30 AM. The CPI is one of the most important reports we see each month. It measures inflation at the consumer level of the economy. As with Tuesday’s PPI, there are two readings in the report- the overall index and the core data. Current forecasts call for an increase of 0.2% in the overall and 0.2% in the core data reading. Smaller than expected increases should lead to a bond rally and lower mortgage rates. However, stronger than expected readings will likely cause a small spike in mortgage pricing.

At 9:15 AM Wednesday, Industrial Production data for July will be posted. This report gives us a measurement of manufacturing sector strength by tracking output at U.S. factories, mines and utilities. It is considered to be of fairly high importance and may cause movement in mortgage rates, particularly long term rates affected by the bond market. Analysts are currently expecting to see a 0.3% increase in production. A higher level of output could lead to higher mortgage rates Wednesday, while a weaker than expected figure should help push rates lower.

Thursday’s only monthly data is July’s Housing Starts data. This report gives us an indication of housing sector strength and mortgage credit demand. However, it isn’t considered to be of high importance to the bond market or mortgage pricing and usually doesn’t cause much movement in mortgage rates unless it varies greatly from forecasts. Although this report is the least important of the week’s reports, it can be an indication of the direction rates will take in the upcoming weeks, and may influence the Federal Reserve’s decisions at their next meeting.

Friday morning, the University of Michigan will release its Index of Consumer Sentiment for August at 9:45 AM. This index gives us a measurement of consumer willingness to spend. If confidence is rising, then consumers are more apt to make large purchases. This helps fuel consumer spending and economic growth. A drop in confidence will probably boost bond prices, leading to lower mortgage rates. If the index rises, indicating that confidence is rising and spending is likely to continue, we may see mortgage rates move higher on Friday.

Overall, look for the most movement in bond prices and mortgage rates the first part of the week. Monday, Tuesday or Wednesday may turn out to be the most important, depending on the results of the various releases. I still feel there is a probabilty of the bond market moving lower than much higher (pushing yields and mortgage pricing higher). This makes it prudent to consider locking an interest rate if you are closing in the immediate future. If we get stronger than expected results in the PPI and CPI releases, I fear that we may see mortgage rates spike higher fairly quickly. If those reports do further ease inflation concerns, I will likely be shifting to a float recommendation. But, the risk versus reward comparison still heavily favors the risk side in my opinion, therefore, I am holding the lock recommendations for the time being.

If you are considering financing or refinancing a home, I suggest you;

• Lock if your closing is taking place within 7 days
• Float if your closing is taking place between 8 and 20 days
• Float if your closing is taking place between 21 and 60 days
• Float if your closing is taking place over 60 days from now

This is only an opinion of what I would do if I were financing a home, and cannot be guaranteed to be in the best interest of all other borrowers.

Friday’s bond market has opened in positive territory because of early stock losses. The stock markets are posting sizable losses with the Dow down 170 points and the Nasdaq down almost 50 points. The bond market is currently up 6/32, but we likely will see little change in mortgage rates as a result of the weakness in bonds that occurred late yesterday.

There is no relevant economic news scheduled for release today. The bond market showed some weakness late yesterday after the results of the 30-year Bond sale, like Wednesday’s 10-year Note sale, was met with a fairly weak demand from investors. This led to afternoon selling and some lenders revised their rates higher, while others remained stable.

Now, this morning’s gains are helping offset those late losses and are keeping this morning’s mortgage rates close to yesterday’s morning rates.   We expect that stocks will drive bonds prices and will be the cause of any potential change to mortgage rates this afternoon.

Next week brings us the release of several important pieces of economic news, including two key inflation readings.  The major data will come during the first part of the week. It starts Monday morning with the release of July’s Retail Sales data. This is a major release because it tracks consumer spending, which makes up about two-thirds of the U.S. economy.

The inflation indexes are scheduled for release on Tuesday and Wednesday. Look for more details on these and the rest of the week’s events later in the week.

If you are considering financing or refinancing a home in Florida,  I would say you should

• Lock if your closing is taking place within 7 days
• Lock if your closing is taking place between 8 and 3 weeks
• Cautiously Float if your closing is taking place between 3 weeks and 2 months
• Float if your closing is taking place over 2 months from now

Remember, this is only an opinion and cannot be guaranteed to be in the best interest of all borrowers.  Please consult a Licensed Florida Mortgage Broker to discuss your best options for your particular situation.

Mortgage Rate Advisor

Thursday’s bond market  opened strong following yesterday’s sell-off. Stocks rallied late yesterday, helping to push bond prices lower during afternoon trading. However, stocks have opened weak this morning and bonds are benefiting by recovering a good portion of yesterday’s losses. The Dow is currently down almost 150 points and the Nasdaq has lost over 20 points. The bond market is currently up 18/32, but due to yesterday’s late selling, we will likely see a slight increase in this morning’s rates compared to yesterday’s pricing.

Yesterday, investor interest was weak in the 10 year note sales, causing other holders to sell. As bond prices dropped, more funds were shifted into stocks. That continued most of the afternoon and led to the afternoon revisions to mortgage rates.

The good news is that bonds are being bought back today. However, there is another Treasury auction today of 30-year bonds,  and those results will be posted at 1:00 PM. We could see selling pick up if it is also met with a lackluster demand.  Rates could then increase in afternoon trading.

The Labor Department posted weekly unemployment claims numbers this morning, which stated that 316,000 new claims were filed last week. This was higher than expected, but didn’t really seem to influence bond trading or mortgage rates.

There is no relevant news or data scheduled for release tomorrow. This will leave bonds to fluctuations in the stock markets. If stocks rise, expect to see bond prices move lower and mortgage rates move higher. If stocks continue to weaken, mortgage rates may improve tomorrow.

If you are currently financing or refinancing a Florida home, I would reccommend thatyou

• Lock if your closing is taking place within 7 days
• Cautiously Float if your closing is taking place between 8 and 3 weeks 
• Float if your closing is taking place between 3 weeks and 2 months
• Float if your closing is taking place over 2 months from now

This is only an opinion and cannot be guaranteed to be in the best interest of all borrowers.

Today’s FOMC meeting has adjourned with no change to key short-term interest rates, as expected. The post-meeting statement  referred to the recent credit and mortgage issues in the economy and the ongoing housing sector problems,  but did nothing to help traders speculate about the Fed’s next move.

The stock markets initially dropped sharply, but have since moved well into positive ground. The Dow is currently up over 40 points while the Nasdaq has gained almost 20 points. The bond market is has fallen into negative territory, which could lead to a slight upward climb mortgage rates. However, many lenders may decide to reflect that change in tomorrow’s rates rather than revise them late this afternoon.

The Labor Department posted today’s only economic news with the release of 2nd Quarter Employee Productivity and Costs data. It showed an increase of 1.8%, which was weaker than the 2.0% level that was forecasted. Normally, weaker than expected results are considered good news for the bond market and mortgage rates. However, strong readings in this data are what traders want to see. This was still a sizable increase, but since it was lower than expected and a few hours ahead of the FOMC adjournment, its results had little impact on the markets or mortgage rates.

There is no relevant economic news scheduled for release tomorrow, so expect the stock markets to be a major influence on bond trading and mortgage rates tomorrow. If we see sizable gains in stocks, expect bonds to falter and mortgage rates to inch higher.

If you are considering financing or refinancing a home in Florida, I would reccommend that you;

• Lock if your closing is taking place within 7 days
• Lock if your closing is taking place between 8 and 3 weeks
• Lock if your closing is taking place between 3 weeks and 2 months
• Float if your closing is taking place over 60 days from now

This is only an opinion and cannot be guaranteed to be in the best interest of any particular borrower.