Florida mortgage rates for conforming and FHA mortgage rates improved last week as we received less than stellar economic data and banks received stern warnings from the White House regarding how they operate.
In addition, each of the 10 major stock sectors took a hit last week, as the the S&P 500 shed nearly 4 percent in its worst weekly showing since October 2009.
As we know, when stock prices fall, investors begin to shift money into bonds, including mortgage-backed bonds. When this happens, mortgage rates fall.
As a result, Florida mortgage rates fell for the third straight week.
Continued lower Florida mortgage rates is helping with home affordability, and existing homeowners in Winter Haven, Lakeland, Orlando, Tampa, and elsewhere around the state are seeing new refinance opportunities.
Florida Mortgage Rate Volatility May Increase This Week
This week, though, mortgage rates could rise back up. There’s a lot going on.
Today, we will receive the December Existing Homes Sales report. Analysts expect the numbers for this report to be extremely weak as compared to November. This is because of a combination of factors including:
- The initial tax credit expiration date of November 30, 2009
- Sharply rising mortgage rates throughout the month of December
- A general slowdown from the holidays and from the weather
As a result, we may see some dire newspaper headlines tomorrow morning.
Other data this week includes the Case-Shiller Index – a measure of home prices nationwide — and the New Home Sales report. The Case-Shiller Index has registered mild home price improvement over the past 8 months and its latest report is expected to show the same. New Home Sales should be similarly strong.
However, the biggest impact we see to mortgage rate volatility comes this week via the first Federal Open Market Committee meeting of 2010.
The “Uncle” Ben Bernanke and company meet tomorrow and Wednesday this week, and Wall Street will be watching intently. As it’s not expected that the Fed will change its interest rate, markets will watching for the Fed’s post-meeting press release.
What the Fed says about the economy will be much more important that what it specifically does about the economy for now.
If the Fed says the economy is growing as expected, look for mortgage rates to rise. Conversely, if the Fed says the economy is at risk, expect mortgage rates to fall.
The safest rate lock strategy this week is to lock your mortgage rate before the Fed’s 2:15 PM ET adjournment Wednesday. Rates will be bouncy all week, but once the Fed’s press release hits the wires, it’s anyone’s guess what will happen.
I hope you found this post useful! As always, if you or anyone you know is in need of a local Florida mortgage loan originator, I’m your guy. Call me at 888-859-7418 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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