Florida Mortgage markets improved last week after a set of widely volatile trading sessions. On the whole, home loan rates in Florida dropped about 1/8 percent – marking the first time in 5 weeks mortgage rates fell.
The volatility we saw last week is nothing new, as it’s been an ongoing trend through most of 2009. When asked why such volatility takes place, I explain to my Florida mortgage clients that we see markets shift up and down to dramatic effect any time analysts fail to agree on what’s next for the economy and. I just so happens that there’s been a lot of this type of disagreement this year. Why do analysts not agree on where the market is going at any one point? It’s all in the data.
Consider the events impacting Florida mortgage rates last week:
At 9:00 AM Tuesday morning, the Case-Shiller Index report showed home prices rising nationwide. Because many analysts believe housing fueled the recession, strength in the sector is widely believe to be a positive for the economy.
Good news for the economy – as we’ve said – means bad news for Florida mortgage rates. As such, rates rose on the news. But the ride had only just begun…
Not an hour after the Case-Shiller numbers came out, the national consumer confidence report showed a substantial deterioration in consumer sentiment as compared to the previous month. The data forced Wall Street to do an about-face. Consumers drive the markets. Don’t let anyone ever tell you any different. When folks lose confidence in where the economy is going, markets drop. Again, when the economy starts to take a dive in the eyes of analysts, we see Florida mortgage rates move down as well.
Think of it this way: The Holiday Shopping Season fast approaching, and the last thing businesses want to see is a suddenly reserved American shopper.
This week, the volatility should continue.
In addition to the release of key employment and housing data, the Federal Open Market Committee (FOMC) has a scheduled 2-day meeting. The group’s Wednesday afternoon adjournment will influence mortgage rates.
The Fed is widely expected to keep the Fed Funds Rate in its target range near 0.000 percent, but it won’t be what the Fed does that will matter as much as what the Fed says. Statements made by Bernanke and company will be dissected and distilled by Wall Street analysts in hopes that they’ll get a better handle on where the economy is going next.
If the FOMC’s press release shows optimism for the economy, mortgage rates will rise in response. Alternatively, if the Fed appears more dour, rates will fall.
Either way, consider locking your rate before the Wednesday afternoon announcement.
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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- Florida Mortgage Rate Update – Week of January 25, 2010 Florida mortgage rates for conforming and FHA mortgage rates improved...
