Florida Mortgage Rates – Evening Report

by Florida's #1 Mortgage Planner on December 10, 2008

Locking Stance: CAUTIOUSLY FLOATING    Mortgage Bonds: +31bp

Mortgage bonds made another valiant effort to break through resistance, but again were beaten back by that resistance.  For those that are wondering, I am still following the FNMA 5.5% because I think that chart is more telling right now.  I know some have switched to the FNMA 5.0% so the move is different and I do look at that chart as well, actually I look at all of these: FNMA 5.5%, FNMA 5.0%, FNMA 6.0%, GNMA 5.5% and GNMA 5.0%, along with the 2-Year and 10-Year T-Notes.  While I look at all, I report based on the one I feel is most appropriate at the time and just wanted to clarify that as some have been wondering.

This was another one of those infrequent days when stocks and mortgage bonds both manage to make gains.  Additionally, this was yet another day when the 10-Year T-Note moved opposite of mortgage bonds, as it closed down 34bp.

Stocks rallied as the Big 3 auto makers got their bailout, albeit only $15billion.  Mortgage bonds rallied on continued buying by the government.  The Treasury auction was not as strange as yesterday’s, in fact today’s was average with only a fair level of foreign participation.  Another Treasury auction is slated for tomorrow.  The Fed is also seeking to change the Federal Reserve Act so that it can offer its own debt as it runs out of its ability to prolong the financial disaster further.

What does this all mean for Florida Mortgage Rates?  Mortgage rates ticked lower today and may continue that move on the heels of tomorrow’s Initial Jobless Claims, or Friday’s Retail Sales (more likely).  However, with mortgage bonds’ inability to break through the “ceiling”, things could still turn ugly and cause mortgage rates to climb.  I still feel the longer term outlook is for mortgage rates to head lower.

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