Florida Mortgage Rate Forecast – September 8, 2010

by Florida's #1 Mortgage Planner on September 8, 2010

Locking Stance:  LOCKING     Mortgage Bonds:  -19bp

Mortgage backed securities are off their lows, which is a good sign, but they are down today, which keeps the concerns alive.  Their closing yesterday marked a solid retracement and that means today’s move lower in MBS prices could spell the end of a retracement and the establishment of a new trend, possibly a downtrend.  As we mentioned before, we still need to solidify the pattern, but there are serious concerns at the moment.

Today had some data compared to yesterday, though nothing significant as MBS prices are being driven by news, money flows (between stocks and bonds) and technical indications.  Yesterday’s short-term Treasury Auctions (3-month and 6-month T-Bills auctions) went very well with high bid/cover ratios and the lowest yields this quarter.  The 3-year T-Note Auction yesterday also was solid, but the smaller amount ($33.0B) needs to be taken into account as well.  Today will see the 10-year T-Note Auction, so we may see some market movement around 1:00.  Data this morning was limited to the weekly MBA Purchase Applications report.  The MBA Purchase Applications report showed Purchase Applications were up 6.3% while Refinance Applications were down 3.1%.  While we see an increase in Purchase Applications, keep in mind these numbers are after a dramatic decrease and Refinance Applications still represent 82% of the total mortgage applications.  We still have the Beige Book to look forward this afternoon, so more market movement may be seen around 2:00.

What does this mean for Florida Mortgage Rates?  Mortgage rates are edging slightly higher this morning and that brings the risk/reward ratio back into the unfavorable side even for the short-term.  The overall outlook is still not etched in stone, but with today’s movement, odds favor mortgage rates edging higher at this moment.

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