Florida Mortgage Rates – Evening Report

by Florida's #1 Mortgage Planner on October 29, 2008

Locking Stance:  LOCKING     Mortgage Bonds:  +9bp

Mortgage backed securities managed to hold just above flat, managing to limit the sell off after the Fed’s decision to cut their Fed Funds Rate by 50 basis points to 1.00%.  Part of the reason they held off was that stocks plummeted as their market came to a close, turning some 300 points lower at the very end.

The FOMC Policy Statement was very bond friendly overall, with the Fed concerned about a sluggish economy, slowdowns in business equipment spending and industrial production, and showing little concerns for the potential of increased inflation.  The main reason they think inflation will remain under control is due to an economic slowdown on a global scale which should dampen exports.  They even left the door wide open for further rate cuts.

On a technical level, mortgage bonds closed below their support layer and that means they may start to drop to retest July’s lows tomorrow.  We may yet get a bounce, but for the long run, we can expect Florida Mortgage Rates to remain on the rise as mortgage bonds continue their downtrend.

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