Florida Mortgage Rates – Afternoon Report

by Florida's #1 Mortgage Planner on February 11, 2009

Locking Stance: LOCKING    Mortgage Bonds: +6bp

Mortgage bonds have been having a big up and down day, remaining close to flat overall as every push higher or lower has rebounded towards their 50-day moving average.  So why aren’t they pushing higher when there have been promises of lower mortgage rates again?

Inflation is one aspect of the equation that plays heavily into where mortgage rates move from here.  While the “indications” are that inflation is tame, other factors show otherwise.  One thing you may already be aware of is that you are paying the same prices for less at the grocery store.  That’s right, a half gallon of ice cream is no longer a half gallon, but the price hasn’t changed.  That’s just one example.  Another indication of inflation potential is gold, and that has been climbing higher lately, up over $50.00 between yesterday and today (5.6%).

The 10-year T-Note Auction was another good indication of the future of mortgage rates.  While the 10-year T-Note yield is not directly linked to mortgage rates (only MBSes are), one can see that traders are demanding higher yields which means that demand will spill over into mortgage bonds as well.  The 10-year T-Note Auction today ended with only moderate demand and yields climbing to 2.818% from 2.419%.

What does this mean for Florida Mortgage Rates?  Mortgage rates will most likely continue to climb unless the government makes due on their promises, which they have not thus far.

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