Florida Mortgage Rates – Evening Report

by Florida's #1 Mortgage Planner on December 22, 2008

Locking Stance: LOCKING    Mortgage Bonds: -69bp

Mortgage bonds had a bad day to say the least, falling 69 basis points and ending the day below support.  The question arises…Is the Bubble Bursting?

So what happened?  Well, we no there was no economic data, and we also know that stocks were down today as well, begging to question why didn’t they rally.  The only real answer is that there was another Treasury auction, this time $38 billion in 2 year T-Notes.  That brought unneeded supply to the markets at a time when traders are few and far between, adding to the volatility.  The bigger concern, as I have mentioned before in regards to the potential of a mortgage rate bubble is that foreign participation in the markets is dwindling.

Now the charts are starting to paint a gloomier picture for mortgage rates moving forward.  Stochastic indications remain overbought and now we have the potential of breaking the trading range in favor of higher mortgage rates.

What does this mean for Florida Mortgage Rates?  If mortgage backed securities are unsuccessful in rallying back, you can expect mortgage rates to climb slightly higher, maybe even significantly higher.

Leave a Comment

Previous post:

Next post: