Florida Mortgage Rates – Evening Report

by Florida's #1 Mortgage Planner on November 19, 2008

Locking Stance:  LOCKING     Mortgage Bonds:  -6bp

Well, folks, the data and news just doesn’t get more mortgage bond friendly than the last three weeks, yet mortgage bonds have failed to reach new heights and that can only mean one thing…higher mortgage rates are likely in store for the future.

As I mentioned earlier, CPI data and news pointed toward reduced inflationary concerns, keeping focus (or fears) on the recession side of the spectrum.  This afternoon, we saw the release of the FOMC Minutes, or “Fed Unplugged”, and that showed the Fed is not concerned about inflation, but are expecting a year long recession (at least).

You have also heard mean mention numerous times that mortgage rates are derived from mortgage backed securities and nothing else.  Many mortgage professionals still follow the 10-year Treasury Note and if you are working with one, chances are you just lost a lot of money.  Mortgage bonds were down 6 basis points today while the 10-year T-Note was up 138 basis points, showing they will move dramatically opposite each other many times.

There are several concerns, the main one being that MBS have not rallied despite the plethora of favorable data and news.  The other is that the charts point to prices faltering in a pattern resembling early September.  Current levels still hang around their 200-day moving average, which is the only real saving grace in the “picture”, but the trading range is shrinking and that will likely pressure bonds lower over time, if not quickly. 

The bottom line is that Florida Mortgage Rates look poised to climb higher in the near future unless mortgage backed securities can find solid ground to stand on and they have already had their best chances at finding that foundation.

Leave a Comment

Previous post:

Next post: