Florida Mortgage Rates – Afternoon Report

by Florida's #1 Mortgage Planner on May 14, 2009

Locking Stance: LOCKING   Mortgage Bonds: +19bp

I think this move will be short lived, but I also need to correct a misstatement from earlier today.  MBS pricing did not fall below their 25-day moving average as I mentioned earlier, rather it was their 40-day MA which I forgot I added to the chart I was looking at this morning.  The overall outlook has not changed except for the fact that the current move, if it holds that is, will provide a higher MBS closing price and will keep a sideways pattern in place, rather than a downtrend.

Why are MBS moving higher.  Thank the Fed, the only buyer in the markets, except for those along for a free ride, and the Fed announcement today allows just that, possibly.  The Fed announced today that they will be buying MBS tomorrow between 10:30 and 11:00, mostly likely as an attempt to offset what they expect to happen after the release of the CPI data.  The announcement doesn’t say exactly how much, but you can expect mass quantities as they have been stepping up their mortgage backed securities purchasing.  Shortly, we should see the latest weekly MBS purchases data to see exactly how much they have stepped up.  Last week was $25.37B net and $73.895B total, so this week may set new records.

What does this mean for Florida Mortgage Rates?  The longer term outlook still favors higher mortgage rates, but the Fed is manipulating the markets again and may break the pattern.

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