Through this past week, Florida Mortgage rates continued to stay a little bit above the record lows we’ve seen over months past. This is in part due to the fact that Wall Street has been happy with 3rd quarter earnings so far this season.
Many US companies are beating analysts’ expectations. However, it’s important to realize that the bulk of companies achieving better earnings are doing so by cutting costs and laying off employees – not by increasing sales.
As usual, there seems to be a disconnect between Wall Street and “Main Street” – in that stocks are soaring higher based on these “positive” reports, but the cost cutting and job cutting measures can only go so far. The writing is on the wall – it’s impossible for companies to continue to trim down their employee base to record levels and then grow their business, hoping that they can provide high levels of service after thinning out their ranks. For evidence of this, we need only to look at the underwriting nightmare that lenders had, and to some extent are still having, after carving out huge chunks of their staff this past year.
Last week’s Jobless Claims numbers came in higher than expected. In a seeming ironic shift – the number of individuals continuing to receive unemployment benefits actually fell to the lowest level since March. However, this is likely the result of people’s unemployment benefits running out, without them having been able to find jobs.
USA May Lose the AAA Credit Rating It’s Maintained Since 1917
Yep. Ratings agency Moody’s lead analyst, Steven Hess, reported recently that the US needs to cut its deficit or risk losing its “AAA” rating in the next 3 to 4 years. This is huge, folks. I mean, really? We have maintained AAA status as a national economy since 1917… and have done so through some pretty tough times!
Think of all we’ve been through – two World Wars, the Depression, three Wall Street collapses and major terrorist attacks…yet our credit quality has maintained that AAA rating, allowing us to issue debt at the most favorable rates.
Just like with Florida mortgages – when the credit rating gets reduced, interest rates move higher. This will definitely be something we’ll keep an eye on as we move forward here over the next few months.
What to Look for with Florida Mortgage Rates for the Week Ahead
Florida mortgage rates for this week will hinge on several key economic events and news reports. We’ll see a record sized round of Treasury auctions this week – and the massive amounts of supply that continue to flood the market can cause home loan rates to move higher, if there is ultimately not enough demand to sop up all the supply.
Tuesday – Tuesday brings both the Consumer Confidence and Durable Goods Reports, with the latter giving us an update on consumer and business consumption and buying behavior via data on items that are non-disposable, like cars, furniture, appliances, games, cameras, business equipment, etc. These reports are always most impactful when it comes to mortgage rates – as they give analysts a true sense of where folks are in regards to their personal feelings about the economy.
Wednesday and Thursday - Wednesday, there will be more news on the housing front with the New Home Sales Report, while Thursday brings another Initial Jobless Claims Report. Thursday also brings a read on the economy with the Gross Domestic Product (GDP) Report, which is the broadest measure of economic activity.
Friday - On Friday, the week could end with a bang, as we’ll receive the Fed’s favorite gauge of inflation, the Core Personal Consumption Expenditure (PCE) Index, found within the Personal Income Report.
Remember: Weak economic news normally causes money to flow out of Stocks and into Bonds, helping Bonds and home loan rates improve, while strong economic news normally has the opposite result.
If you see a Florida mortgage rate you like, lock it in now.
I hope you found this post useful! As always, if you or anyone you know is in need of a local Florida mortgage broker, I’m your guy. Call me at 863-604-3019 or apply online for your Florida mortgage. We’ll keep you posted and let you know when it’s time to pull the trigger!
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