Lakeland Mortgage Update: Week of February 1, 2010

Lakeland mortgage borrowers saw mortgage rates improve last week, despite some of the economic and financial news we received.

The news breakdown from last week is as follows:

The Federal Reserve relayed high hopes for continued economic recovery
Consumer Confidence pushed to a 2-year high
4th Quarter domestic output exceeded Wall Street’s expectations

Normally, when we receive these kinds of financial and economic news reports, investors begin to pull money out of “safer” bond markets and put it back into “risker” stock investments – as Wall Street preps for better corporate earnings. The movement pressures mortgage rates to rise.

Last week, however, different stories trumped the headlines including a report from Standard & Poor’s that said U.K. banks are no longer counted among the world’s most stable. This research, in particular, triggered a flight-to-quality among investors that pumped the U.S. dollar and sparked new demand for mortgage bonds.

This is but one reason we saw Lakeland mortgage rates improve, and it shows how unpredictable mortgage rates can be.

This week figures to be a challenge, too.

First, we start the week with key inflation data. When inflation runs hot, it’s usually bad for mortgage rates. Inflation is expected to be tame, however — a point the Fed made several times in its press release last week. That said, inflation data is closely watched by markets and can make a big impact on rates.

Then, on Wednesday, ADP releases its private sector job report. The ADP data is a precursor to the government’s own Non-Farm Payrolls report which is due to hit Friday. ADP is expected to show a net loss of roughly 85,000 jobs. Depending on where the actual numbers comes in, mortgage rates could wiggle a bit.

If the ADP report shows much fewer than 85,000 jobs lost, expect mortgage rates to rise. The same is true for Friday’s job report. A miss on expectations will cause mortgage to ratchet higher.

Since peaking on the last day of December, mortgage rates took a slow, steady descent through January. They’ve have taken back close to two-thirds of December’s overall losses. This week, rates could fall some more, or they could bounce back up. The most prudent time to lock would be prior to Tuesday’s closing.

After that, the respective jobs reports will take over and rates could go either way with force.

As always, if you’re on the fence as to whether to lock in your Lakeland mortgage rate, consider talking to a qualified mortgage broker now about doing so. Volatility is still in the picture, so locking when you see a rate you like is advised.

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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